A monthly poll indicates that advisers’ assessment of the United States economy rose modestly last month, even as their optimism about continued market gains slipped, according to the same survey that tracks both current sentiment and forward-looking expectations.
Sentiment toward equities fell three points in September, reaching 115 on the Wealth Management WMIQ Advisor Sentiment Index. The figure remains above the neutral benchmark of 100, yet it sits 12 percent beneath the record level recorded in May. The index, produced by Wealth Management, is released each month.
Just 10 percent of participants now rate market performance negatively. Their six-month outlook is split: 34 percent anticipate gains, 26 percent foresee no change, and 39 percent predict a downturn. A similar spread appears for the 12-month horizon, where 41 percent expect improvement and 37 percent see a decline. The share holding a short-term bearish view has risen to a five-month peak.
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Markets and the Economy
The majority of advisers consider the equity market fundamentally sound, pointing to solid data, corporate profit growth and ongoing price increases. Nonetheless, a number warn that stocks appear overvalued, trading at historically lofty multiples, which could make them especially sensitive to weak economic reports or earnings misses. These observations reflect the latest data collected through September.
Regarding the broader economy, sentiment rose four points in September to a reading of 106. Four in ten respondents (41%) consider the current state of the economy to be positive. An additional 42% consider it average. Respondents are evenly divided on the prospects for the economy over the next six months. One-third (33%) expect an improvement; 34% expect no change; and 33% expect a decline. They remain divided, albeit slightly more optimistic, looking forward 12 months, with 43% expecting an improvement and 36% expecting a decline.
A substantial share of advisors’ comments tie the economic and market outlook to elections, congressional control, federal policy, government spending and national debt. While respondents differ sharply in their political perspectives, the broader theme is that most advisors remain optimistic, even as a significant number report that uncertainty about government policy and fiscal direction is influencing their confidence in the future trajectory of the economy and markets.