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

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

Morgan Stanley Wealth Management today announced results from its quarterly individual investor pulse survey:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240118687834/en/

(Graphic: Morgan Stanley Wealth Management)

(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%

 

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