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Morgan Stanley Wealth Management Pulse Survey Reveals Investor Views Cool Amid Continued Monetary Tightening

Yet many believe that the economy will end up in a good place by the end of the year

NEW YORK–(BUSINESS WIRE)–Morgan Stanley Wealth Management today announced results from its quarterly individual investor pulse survey:

  • Confidence dropped. While over half believe the economy will be in better shape by the close of 2023 (53%), this sentiment dropped 11 percentage points since last quarter.
  • Bearish views remain elevated. Nearly half remain bearish at 48%. And the majority (89%) of investors expect volatility to sustain or increase this quarter.
  • There’s cautious optimism for a brighter end of year. Despite concerns surrounding inflation and the Fed, investors are cautiously optimistic about the future—50% believe that inflation will reach normal levels by the end of the year, 47% say that the Fed will be able to steer the economy into a ‘soft landing’, and 45% think that the economy is healthy enough for further rate hikes.

“It was a busy first quarter to put it mildly, amid a banking sector rout, sustained geopolitical turmoil, and the sober realization that rate cuts are not coming any time soon,” said Mike Loewengart, Head of Model Portfolio Construction for Morgan Stanley Portfolio Solutions. “The bottom line is that investors need to be prepared for a bumpy road. Inflation challenges will not change overnight and the Fed will continue to do everything in its power to bring it back down to normal levels. Shifts in the market are occurring quickly, so it’s important for investors to sit tight and stay calm during periods of volatility.”

The survey explored investor views on sector opportunities for the second quarter of 2023:

  • Energy – Despite geopolitical tensions weighing on this historically volatile sector, investors continue to view energy as their top pick (46%).
  • IT – Amid shakeups in the tech industry, investors turned more bullish on the sector with a 7 percentage point jump in interest quarter over quarter to 42%.
  • Health care – Amid looming recession fears, the sector remains in the top 3 (38%) as investors look to the historically defensive sector to shore their portfolios.

About the Survey

This wave of the survey was conducted from April 3 to April 20 of 2023 among an online US sample of 924 self-directed investors, investors who fully delegate investment account management to financial professionals, and investors who utilize both. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into thirds investable assets: less than $500k, between $500k to $1 million, and over $1 million. The panel is 60% male and 40% female and self-select as having moderate+ investing experience, with an even distribution across geographic regions, and age bands.

About Morgan Stanley Wealth Management

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

This has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a Financial Advisor.

Morgan Stanley Portfolio Solutions are portfolios available in our Select UMA platform under either Firm Discretionary UMA or Managed Advisory Portfolio Solutions. Please see the Select UMA ADV at www.morganstanley.com/ADV

Past performance is not a guarantee or indicative of future performance. Historical data shown represents past performance and does not guarantee comparable future results.

This material contains forward-looking statements and there can be no guarantee that they will come to pass.

Diversification and asset allocation do not guarantee a profit or protect against loss in a declining financial market.

This material should not be viewed as investment advice or recommendations with respect to asset allocation or any particular investment.

Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States.

Morgan Stanley Smith Barney LLC and Dynata are not affiliates.

© 2023 Morgan Stanley Smith Barney LLC. Member SIPC.

Referenced Data

Please rate how much you agree or disagree with the following statements: The U.S. economy will be in better shape than it currently is by the end of this year.

 

Q1’23

Q2’23

 

Total

Total

Top 2

64%

53%

Strongly agree

26%

19%

Somewhat agree

38%

34%

Neither agree nor disagree

17%

20%

Somewhat disagree

12%

18%

Strongly disagree

7%

9%

When it comes to the current market are you?

 

Q1’23

Q2’23

 

Total

Total

Bearish

52%

48%

Bullish

48%

52%

Over the next quarter, do you think volatility will…

 

Q2’23

 

Total

Top 3

89%

Greatly increase

15%

Somewhat increase

40%

Stay the same

34%

Somewhat decrease

11%

Greatly decrease

Please rate how much you agree or disagree with the following statements: Inflation will continue to slow, and we will reach normal levels of inflation by the end of the year.

 

Q2’23

 

Total

Top 2

50%

Strongly agree

17%

Somewhat agree

33%

Neither agree nor disagree

22%

Somewhat disagree

19%

Strongly disagree

9%

Please rate how much you agree or disagree with the following statements: The Fed will be able to steer the economy into a “soft landing.”

 

Q2’23

 

Total

Top 2

47%

Strongly agree

12%

Somewhat agree

35%

Neither agree nor disagree

30%

Somewhat disagree

15%

Strongly disagree

8%

Please rate how much you agree or disagree with the following statements: The U.S. economy is healthy enough for the Fed to enact additional rate hikes this quarter.

 

Q2’23

 

Total

Top 2

45%

Strongly agree

15%

Somewhat agree

30%

Neither agree nor disagree

24%

Somewhat disagree

22%

Strongly disagree

9%

What industries do you think offer the most potential this quarter? (Top three)

Q1’23

Q2’23

 

Total

Total

Energy

50%

46%

Information technology

35%

42%

Health care

40%

38%

Utilities

31%

29%

Real estate

27%

29%

Financials

30%

27%

Consumer staples

24%

23%

Industrials

18%

20%

Communication services

18%

19%

Materials

18%

17%

Consumer discretionary

9%

11%

 

Contacts

Media Relations Contact: Lynn Cocchiola, [email protected]

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