A majority of investors across different regions anticipate that the US stock market will outperform other financial regions in the second quarter of this year, according to a recent survey.
Approximately 40 percent of respondents believe Europe will lag behind, indicating mixed confidence among market participants amid growing uncertainty in global financial markets, as per a survey conducted by Saxo Bank, a leading global online trading and investment firm.
“Understanding investor expectations is crucial for navigating dynamic markets. The survey results reinforce the importance of staying informed about macroeconomic events and geopolitical tensions, guiding our clients to make well-informed investment decisions in the interconnected market landscape of the MENA region,” stated Damian Hitchen, CEO of Saxo Bank MENA.
Saxo Bank reported that investors, including its clients, entered 2024 with optimism following a strong 2023, during which a recession was averted, and equities delivered significant returns.
Peter Garnry, Head of Equities Strategy at Saxo Bank, remarked, “This optimism has been reflected in 2024 so far, despite unusual volatility surrounding central bank policy rates and inflation expectations.”
Market Sentiment Shifts: Insights from Saxo Bank Executives and Client Survey
Senior executives at Saxo Bank noted that the beginning of 2024 has been marked by shifting market expectations.
“At first, overall sentiment was largely negative, as market participants anticipated interest rate cuts. However, it has since unexpectedly turned more positive, with many stock markets reaching or approaching all-time highs,” they observed.
The survey revealed a split sentiment among clients regarding the primary US S&P 500 index, with slightly over half expecting an increase and nearly thirty percent anticipating a decrease.
Investors identified central bank policies as a crucial factor influencing this quarter’s financial markets.
Furthermore, the survey highlighted that geopolitical tensions, the upcoming US election, and persistent recession concerns are also significant factors likely to impact investment strategies.
“With interest rate cuts continually postponed, geopolitical tensions remaining high, and the US election drawing closer, there is considerable potential for increased volatility in financial markets. Clients are advised to review whether their portfolios are prepared for a potentially turbulent quarter and beyond,” Garnry advised.
