Investors’ Market Outlook Influenced by Politics, Trade War and Slowing Economic Growth

This week’s Sentiment Survey special question asked AAII members what factors are most influencing their six-month outlook for stocks. Slightly more than a third of all respondents (34%) say Washington politics, including President Donald Trump. The ongoing trade war is a close second, listed by 33% of all respondents. Nearly 26% say slowing economic growth while 13% mention the economy’s sustained expansion. Monetary policy, interest rates and the Federal Reserve are influencing the outlook of 24% of respondents. Many respondents list more than one influence.

Here is a sampling of the responses:

• “Fed response to the economic situation, particularly trade tensions and slowing GDP.”
• “Slowing corporate economic activity, probably the confusion over the trade and other economic policies of this administration.”
• “The economy appears to be strong and the inverted yield curve indicates that the downturn may be farther out.”
• “With earnings still looking good as well as the job market, I feel the stock market will continue to rise into early 2020.”
• “Federal Reserve, slowing global economy and trade standoff with China; I don’t know how any of them will pan out and how the market will respond.”

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