Financial advisors are feeling much better about the outlook for the stock market and the broader economy in the wake of Donald Trump's presidential election victory.
Stock market sentiment rose 7.5% in the week after the election, to register at 130. (A reading of 100 equals a completely neutral view). This is the highest level of optimism around the markets since the beginning of the year.
Also hitting a yearly high, sentiment about the health of the economy jumped almost 6% to 117.
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Over half (56%) consider the current state of the economy to be “good” or “excellent”.
Advisers expressed more muted optimism for the economy over the next six months. Forty-two percent expect an improvement, while 30 percent expect no change.
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They regain a more positive outlook when looking out for a year. Over half predict the economy will be better a year later. However, few advisers are hedging their bets here: Almost 40% predict a decline.
The trends are similar when asked about the stock market. Almost half (47%) say the market has room to improve over the next six months; Over half (55%) see higher market values this time next year — however a significant number (39%) take the opposite view and predict the markets' health to be “somewhat worse” or “much worse “.
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While it's not clear that the results of the presidential election are the only factor driving adviser sentiment, many of those surveyed cited improved prospects for businesses and wealth creation under Trump, with a promise to cut taxes and ease regulatory burdens. .
The S&P 500 rose over 5% in November. The market index fell sharply in December.
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Methodology, data collection and analysis by WealthManagement.com and Informa Engage. The methodology conforms to accepted marketing research methods, practices and procedures. Beginning in January 2024, WealthManagement.com began promoting a short monthly survey to active users. Data will be collected within the last 10 days of each subsequent month, with a target of at least 100 financial advisor respondents per month. Respondents were asked about their view of the economy and the stock market as of now, six months from now and one year from now. The responses are weighted and used to create an index tied to a neutral value of 100. Over time, the ASI will provide a sense of the direction of retail financial advisors.