Inflation concerns decline nearly ten points
from the second quarter
Traders are feeling better about the markets than they have any
time in the past two years with 56% reporting a bullish outlook for
the next three months, up ten points from the second quarter. This
is according to the latest Charles Schwab Trader Sentiment Survey,
a quarterly survey that explores the outlooks, expectations, and
perspectives of traders at Charles Schwab.
Trader optimism extends beyond the short-term market outlook,
with nearly six in ten traders feeling it is a good time to invest
(up 11 points QoQ) and more than half saying they are better off
financially compared to a year ago (up five points QoQ and seven
points YoY). Additionally, most traders (69%) are confident in
their decision-making.
Trader confidence trends
4Q ‘23
1Q ‘24
2Q ‘24
3Q ‘24
Good time to invest
41%
49%
48%
59%
Better off financially
33%
54%
55%
60%
Confident in decision-making
64%
68%
69%
69%
Inflation, which was traders’ top concern last quarter, fell to
third place while expectations for Fed rate cuts increased.
Thirty-three percent of those surveyed expect rate cuts of 50 basis
points or more in the remainder of the year, up from 25% of
respondents predicting such cuts last quarter.
“Coming into the third quarter, traders reported higher levels
of optimism about the markets and economy – and continued
confidence in their own decision-making,” said James Kostulias,
head of Trading Services at Charles Schwab. “While we have seen
increased market volatility since fielding our Q3 survey, we’re
seeing some longer-term positivity among traders, and they are in a
better position than ever before to manage volatility and market
risks in a nuanced way thanks to the insights, education, and
professional-grade platforms and tools at their fingertips.”
Sector and asset class views
Traders favored AI stocks (62%) with bullishness toward the
segment increasing six points from Q2. They point to Information
Technology (49%) as the sector that will be most impacted by the
rise of AI, followed by Health Care (15%).
Looking across sectors, traders were most bullish toward
Information Technology followed by Energy, Health Care, and
Utilities. They were least bullish on Real Estate and Consumer
Discretionary.
Bullish Sector Sentiment
2Q ‘24
3Q ‘24
Information Technology
51%
61%
Energy
64%
57%
Health care
40%
49%
Utilities
37%
45%
Finance
30%
40%
Communications
29%
37%
Consumer Discretionary
20%
23%
Real Estate
19%
21%
When asked about asset classes and styles, traders reported
increasingly positive sentiment toward growth stocks, mega cap
tech, domestic stocks, and equities in general. Fewer traders were
bullish on spot Bitcoin ETFs and spot ether ETFs.
Bullish sentiment over next three
months
1Q ‘24
2Q ‘24
3Q ‘24
Artificial intelligence stocks
61%
56%
62%
Domestic stocks
52%
51%
59%
Growth stocks
50%
47%
58%
Mega cap tech stocks
49%
47%
57%
Equities in general
48%
50%
57%
Value stocks
54%
49%
53%
Spot Bitcoin ETFs
N.A.
N.A.
22%
Spot ether ETFs
N.A.
N.A.
21%
Looking at which instruments traders are considering trading in
Q3, a modest percentage are interested in trading spot Bitcoin ETFs
(13%) and spot ether ETFs (11%). Most are considering trading
options (65%) and almost half (48%) plan to trade AI stocks.
Election comes into focus
The political landscape in D.C. is a top concern among traders,
followed by worries that the market is due for a correction.
Primary concerns within the next three
months
2Q ‘24
3Q ‘24
The political landscape in Washington
D.C.
15%
20%
Market is due for a correction
13%
13%
Inflation
19%
10%
Geopolitical/global macro issues
11%
8%
AI bubble
3%
7%
Potential of a recession
4%
7%
Most traders (94%) believe the presidential election will have
at least some impact on financial markets. As the election
approaches, almost half (44%) say they are reducing risk in their
portfolio and 25% are engaging in options hedging to navigate the
election’s impact in advance.
“A lot has happened in the election in the past few weeks, and
traders will continue to be hit with a constant stream of news
between now and Election Day,” said Kostulias. “What we see from
our survey data is that traders plan to take a measured approach to
trading in relation to the election. A sizeable portion are taking
steps to manage risk, and even more are leaving the election out of
their trading plans–a good indication that they are paying close
attention but not being overly reactive.”
About the Charles Schwab Trader Sentiment Survey
The Charles Schwab Trader Sentiment Survey is a quarterly study
exploring the outlooks, expectations, trading patterns and points
of view of clients at Charles Schwab–who actively trade equities or
trade options, futures, or forex. The study included 1,040 Active
Trader clients at Charles Schwab between the ages of 18-75 and was
fielded from July 9-19, 2024.
About Charles Schwab
At Charles Schwab, we believe in the power of investing to help
individuals create a better tomorrow. We have a history of
challenging the status quo in our industry, innovating in ways that
benefit investors and the advisors and employers who serve them,
and championing our clients’ goals with passion and integrity.
More information is available at aboutschwab.com. Follow us on
X, Facebook, YouTube, and LinkedIn.
Disclosures
Content intended for educational/informational purposes only.
Not investment advice, or a recommendation of any security,
strategy, or account type.
Historical data should not be used alone when making investment
decisions. Please consult other sources of information and consider
your individual financial position and goals before making an
independent investment decision.
All investments involve risk including the possible loss of
principal. Please consider all risks and objectives before
investing.
©2024 Charles Schwab & Co., Inc. All rights reserved. Member
SIPC.
0824-MJXM
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version on businesswire.com: https://www.businesswire.com/news/home/20240828737610/en/
Margaret Farrell Director, Corporate Communications (203)
434-2240 margaret.farrell@schwab.com
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