Morgan Stanley Wealth Management Pulse Survey Reveals Significant Increase in Bullish Investor Sentiment

Rhea-AI Summary

Morgan Stanley Wealth Management released results from its quarterly individual investor pulse survey, showing increased bullishness and optimism about the economy among investors. Over 60% of investors are bullish, with 60% believing in a 'soft landing' executed by the Fed. Despite inflation concerns, investors remain engaged with the market, with IT, energy, and healthcare sectors being top opportunities for the first quarter of 2024.

More are confident that the Fed will execute a ‘soft landing’

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley Wealth Management today announced results from its quarterly individual investor pulse survey:

(Graphic: Morgan Stanley Wealth Management)

• With beliefs in future rate cuts growing, bullishness increased. Over half of investors (60%) are bullish this quarter—up 9 percentage points from Q4 2023.
• Optimistic views of the economy ticked up. Three in five investors (60%) believe the Fed can execute a ‘soft landing’—up 7 percentage points since last quarter. Further, over half think the economy is healthy enough for a rate cut (58%).
• Investors remain engaged with the market. Over two in five investors (42%) said they do not plan to make any changes to their portfolios for the next 6 months, followed by 26% noting they will change allocations, and 18% plan to move out of cash and in to new positions.
• Yet, inflation continues to be a top concern. Nearly half (49%) said inflation is the top concern for their portfolio, followed by this year’s presidential election (26%), and a recession (24%).

“With the Fed broadcasting interest rate cuts in 2024, it’s not surprising to see traders reengaging with the market,” said Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley. “That said, as we kick off the year with relatively muted stock performance, investors may need to be patient with when these cuts will actually take place. Economic metrics continue to be strong, so there may not be a huge rush from the Fed.”

The survey explored investor views on sector opportunities for the first quarter of 2024:

• IT – Technology moved back into the top spot for where investors see opportunity this quarter. This perennial favorite saw increased interest—up 7 percentage points from last quarter to 53%— as rate cuts could further strengthen the sector.
• Energy – Interest in energy slipped but remained high with 45% of investors eyeing opportunities in the sector, as it underperformed in 2023.
• Health care – Investor interest remains steady in this historically defensive sector, at 38%.

About the Survey 
This wave of the survey was conducted from January 3 to January 17 of 2024 among an online US sample of 903 self-directed investors, investors who fully delegate investment account management to financial professionals, and investors who utilize both. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into thirds investable assets: less than $500k, between $500k to $1 million, and over $1 million. The panel is 60% male and 40% female and self-select as having moderate+ investing experience, with an even distribution across geographic regions, and age bands.

About Morgan Stanley Wealth Management 
Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

About Morgan Stanley 
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

This has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a Financial Advisor.

Morgan Stanley Portfolio Solutions are portfolios available in our Select UMA platform under either Firm Discretionary UMA or Managed Advisory Portfolio Solutions. Please see the Select UMA ADV at www.morganstanley.com/ADV

Past performance is not a guarantee or indicative of future performance. Historical data shown represents past performance and does not guarantee comparable future results.

This material contains forward-looking statements and there can be no guarantee that they will come to pass.
Diversification and asset allocation do not guarantee a profit or protect against loss in a declining financial market.

This material should not be viewed as investment advice or recommendations with respect to asset allocation or any particular investment.
Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States.

Morgan Stanley Smith Barney LLC and Dynata are not affiliates. 
© 2024 Morgan Stanley Smith Barney LLC. Member SIPC.

Referenced Data

When it comes to the current market are you?
	Q4’23	Q1’24
	Total	Total
Bullish	51%	60%
Bearish	49%	40%

Please rate how much you agree or disagree with the following statements: The Fed will be able to steer the economy into a "soft landing."
	Q4’23	Q1’24
	Total	Total
Top 2	53%	60%
Strongly agree	19%	17%
Somewhat agree	34%	43%
Neither agree nor disagree	24%	25%
Somewhat disagree	14%	12%
Strongly disagree	9%	3%

Please rate how much you agree or disagree with the following statements: The U.S. economy is healthy enough for the Fed to cut rates this quarter.
	Q1’24
	Total
Top 2	58%
Strongly agree	18%
Somewhat agree	40%
Neither agree nor disagree	22%
Somewhat disagree	15%
Strongly disagree	5%

When it comes to your portfolio for the next six months are you considering any of the following strategies?
	Q1’24
	Total
Make no changes to my portfolio	42%
Change the allocations in my portfolio	26%
Move out of cash and in to new positions	18%
Move out of current positions and in to cash	14%

Which of the following are you most concerned about when it comes to your portfolio? (Top 2)
	Q1’24
	Total
Inflation	49%
2024 election	26%
A recession	24%
Market volatility	22%
Geopolitical conflict	18%
Earnings	16%
Fed monetary policy	14%
Energy costs	13%
Narrow market driven by mega-caps	4%
None	1%

What industries do you think offer the most potential this quarter? (Top three)
	Q4’23	Q1’24
	Total	Total
Information technology	46%	53%
Energy	47%	45%
Health care	36%	38%
Real estate	28%	29%
Financials	29%	28%
Utilities	24%	25%
Communication services	20%	20%
Industrials	19%	19%
Consumer staples	23%	18%
Materials	17%	14%
Consumer discretionary	11%	11%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240118687834/en/

Media Relations: Lynn Cocchiola, Lynn.Cocchiola@morganstanley.com

Source: Morgan Stanley Wealth Management

FAQ

What were the results of Morgan Stanley Wealth Management's quarterly individual investor pulse survey?

Morgan Stanley Wealth Management's survey showed increased bullishness and optimism about the economy among investors, with over 60% of investors being bullish and believing in a 'soft landing' executed by the Fed.

What are the top concerns for investors according to the survey?

According to the survey, nearly half of investors are concerned about inflation, followed by concerns about this year's presidential election and a potential recession.

What sectors do investors see as opportunities for the first quarter of 2024?

Investors see IT, energy, and healthcare sectors as top opportunities for the first quarter of 2024, with technology moving back into the top spot and energy remaining high despite underperforming in 2023.

What percentage of investors believe in a 'soft landing' executed by the Fed?

60% of investors believe in a 'soft landing' executed by the Fed, according to the survey results.

Who commented on the survey results and what did they say?

Chris Larkin, Managing Director, Head of Trading and Investing at E*TRADE from Morgan Stanley, commented on the survey results, stating that it's not surprising to see traders reengaging with the market with the Fed broadcasting interest rate cuts in 2024, but that economic metrics continue to be strong, so there may not be a huge rush from the Fed.