Trade, Monetary Policy and Politics Most Influencing Investors’ Outlook

This week’s Sentiment Survey special question asked AAII members which factors are most influencing their six-month outlook for stocks. Responses are very mixed. Trade, particularly negotiations between the U.S. and China, is mentioned by 17% of respondents. Monetary policy and the direction of interest rates is second, named by 12% of respondents. About 10% of respondents say Washington politics, particularly President Donald Trump, while 5% say geopolitical issues. Slightly more than 9% view market valuations as being too high. The pace of global economic growth, domestic economic growth and second-quarter earnings season were cited by groups representing 8% of all respondents. Some respondents listed more than one factor.

Here is a sampling of the responses:

• “It appears that the global economy continues to grow, and corporate revenue and profits should as well.”
• “Resolution of trade conflict with China and expectation for no further increases in interest rates.”
• “President Trump and his unpredictability.”
• “An aging bull market, somewhat high valuations and the possibility of a recession looming.”
• “World politics and negotiations with China.”

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