U.S. financial professionals in a new survey say they expect the stock market to continue to right itself in the second half even as they express strong concerns about volatility and recession fears, Natixis Investment Managers reported Monday.
Their counterparts in the rest of the world were more pessimistic.
CoreData Research conducted the survey between March 16 and April 24 among 2,700 wirehouse advisors, RIAs and independent broker-dealers with $135 billion in client assets in 16 countries and territories in Asia, Continental Europe, Latin America, the U.K. and the Americas. The U.S. segment comprised 300 financial professionals with $29 billion in assets and an average of 22 years’ industry experience.
U.S. survey participants forecast modest losses this year of 3.6% for the S&P 500 and 6.1% for the MSCI World Index.
In contrast, respondents globally forecast a loss of 7% for the S&P 500 and 7.3% for the MSCI World Index at year-end.
Natixis noted that these 2020 return expectations more closely resembled the modest declines seen in 2018 — when the S&P declined 4.4% and the MSCI World 8.2% — than in 2008, when the S&P plunged 37% and the MSCI 40%.
Unlike the brighter outlook of financial professionals in the U.S. market, those elsewhere were notably more pessimistic in their predictions for stock performance in their own markets:
- France – CAC 40: -5.6%
- Hong Kong – Hang Seng: -11.5%
- Italy – FTSE MIB: -13.5%
- Australia – ASX 200: -12.6%
- Germany – DAX: -16.6%
- U.K. – FTSE 100: -7.2%
Continuing volatility was the top risk to portfolio performance and market outlook cited by 65% of U.S. professionals, while 64% were worried about recession.
Forty-three percent of the U.S. contingent said uncertainty around geopolitical events posed a risk to their portfolios, while 25% expected the November presidential election to be a factor.
In what Natixis said was a dramatic shift in risk concerns from previous years’ surveys, only 22% of U.S. respondents expressed concern about low yields.
“Advisors in the U.S. seem to be giving an initial vote of confidence to the swift and dramatic actions taken by Fed and Congress in response to the pandemic, as well as the resiliency of the U.S. economy,” David Giunta, chief executive for the U.S. at Natixis Investment Managers, said in a statement.