Optimism about the performance of stock markets is highest among investors between 18 and 35 years, as 59 percent of this age group thinks that the market will increase in the third quarter of 2024, according to a survey by Saxo, which reviewed the responses of about 2,300 clients of different ages.
Young Bulls and Old Bears
On the other hand, only 33 percent of investors aged above 76 years, the highest among all age groups, believe that the market will go up in the next three months, while 25 percent of them think it will tumble. Clients from this demographic also remain at the top in pessimism.
When it comes to other age groups, 47 percent of investors between 36 and 45 years think that the market will move upward, while the figures are 44 percent and 43 percent for the age groups between 46 and 60 years and 61 and 75 years, respectively.
When it comes to the year-to-date performance, most stock markets witnessed significant upward rallies. America’s S&P 500 index jumped 15.6 percent since January, while the UK’s FTSE 100 and Germany’s DAX moved up by 6.5 percent and 9.25 percent, respectively.
“The equity market has done very well this year, underscoring the optimism among our clients,” said Peter Garnry, Chief Investment Strategist at Saxo.
Growing divergence: so far this year, Mag 7 (orange) is up by nearly 35%, S&P 500 (blue) is up by nearly 14%, and equal-weighted S&P 500 (white) is up by 3.4%
— Liz Ann Sonders (@LizAnnSonders) June 17, 2024
[Past performance is no guarantee of future results] pic.twitter.com/ApOTmDTXn4
Neutral Sentiment Dominates
Overall, 43 percent of the respondents of Saxo’s survey are anticipating an increase in the global equities market in the coming months. However, the response of “no movement” also jumped to 29.8 percent from the previous quarter’s 15.2 percent.
“The increase in clients answering ‘no movement’ could, in my mind, signal two things,” Garnry said, adding: “One is that there’s usually a summer lull when the Northern hemisphere goes on vacation, which could signal less movement in markets. Two, it could be some clients that have previously been very positive are starting to see clouds of uncertainty on the horizon. That’s at least what we believe: while things seem to be going fine now, there are uncertainties that could make the slightly longer future more uncertain.”
The ongoing geopolitical tensions have already impacted stock markets globally, and 42.9 percent of respondents agree with this, with another 37.1 percent pointing to interest rates as a major factor. Further, 32.8 percent of respondents consider the looming US elections to be another major factor.
“Geopolitics can always be a source of volatility, so our clients should be following the news closely to adjust and diversify their portfolios accordingly,” Garnry added.
When it comes to sector-wise performance, 32.2 percent of respondents see information technology as the top performer, followed by 16.1 percent favouring healthcare. However, optimism about the energy sector dropped the most by 63 percent, leaving only 6.4 percent of Saxo clients favouring an upward rally.
