Morgan Stanley Wealth Management has released the findings of its latest quarterly retail investor pulse survey, highlighting a cautious optimism among investors despite short-term market volatility. The survey reveals that while 59% of investors remain bullish, this figure has decreased by two percentage points from the previous quarter due to concerns over the US election and geopolitical tensions.

The report notes a significant decrease in inflation concerns, down eight percentage points from the third quarter. However, issues such as the 2024 election (34%) and market volatility (23%) continue to be top concerns for investors. Optimism regarding a "soft landing" for the economy has increased, with 64% of respondents believing that recent rate cuts will help achieve this outcome—a rise of ten percentage points since last quarter.

Chris Larkin, Managing Director and Head of Trading and Investing at E*TRADE from Morgan Stanley, commented on the findings: “It certainly feels like we’re at a bit of an inflection point with the Fed in rate cutting mode and investors remaining bullish. With year-end in close range, investors are starting to take stock of where the market stands but questioning what’s ahead. Despite some trepidation from the election and geopolitical uncertainty, the momentum from September has investors confident.”

The survey also examined investor interest in various sectors for Q4 2024. Interest in IT dropped slightly by three percentage points to 54%, yet it remains the top sector due to ongoing supply-demand conditions and AI chip shortages. In contrast, energy maintains bullish sentiment at 43% despite sector weaknesses linked to crude oil price dips. Meanwhile, health care saw an increase in interest as a defensive sector amid looming elections.

Conducted between October 1-14, 2024, by Dynata among 990 self-directed investors across various investment management styles and asset levels, this survey carries a margin of error of ±3.20 percent at a confidence level of 95%. Participants included both male (60%) and female (40%) respondents who identify as having moderate or higher investing experience.

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