October 17, 2016

E*TRADE Study Reveals Investors Are Optimistic Despite Uncertainties on the Horizon

(Graphic: Business Wire)

Positive sentiment increased across several key measures despite a potential rate hike and the upcoming U.S. presidential election

NEW YORK--(BUSINESS WIRE)-- E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from the most recent wave of StreetWise, E*TRADE's quarterly tracking study of experienced investors. Results indicate a decisive uptick in positive investor sentiment:

  • Slightly more than half of all investors believe the market will rise this quarter, up 13 percentage points from Q3.
  • Slightly more than half of all investors also believe the U.S. economy is healthy enough for additional rate hikes this quarter, up 20 percentage points from Q3.
  • "Easy Rider" is catching up to "Dazed and Confused" as the movie title that best describes investor views of the market. Since Q3, the former increased 9 percentage points, while the latter dropped 10 percentage points.
  • The majority of investors remain bullish at 55 percent.

"While Q3 saw investors bracing for the aftershocks of Brexit, going into Q4 investors' optimism in the market and U.S. economy appears remarkably strong given possible uncertainty surrounding the election and additional Fed action," commented Mike Loewengart, VP of Investment Strategy at E*TRADE Financial. "Investors may have taken to heart the reality that non-political macro events, like interest rates and inflation, typically affect the market much more than elections."

The survey also explored where investors feel potential investment opportunities may be this quarter. Mr. Loewengart offered insight into those identified:

  • Information technology. Half of all investors believe the information technology sector offers potential in Q4, up 6 percentage points from the previous quarter. After investor interest in information technology dipped in Q3, the sector returned to favorability, possibly buoyed by attractive valuations.
  • Financials. Investor sentiment in financials rose to 32 percent in Q4, up 7 percentage points. As the possibility of a Fed rate hike in Q4 increases, investors may view financials as a sector that could benefit from interest rates moving higher.
  • International markets. While investors still favor domestic markets, interest in international markets—both developed and emerging—has increased since Q3. Perhaps interest in these markets—specifically the developed countries in Europe—may have risen as concerns over the impact of Brexit may have subsided.

E*TRADE helps investors balance today's needs with tomorrow's goals, through pioneering digital tools coupled with guidance online and from financial consultants. To learn more about E*TRADE's trading and investing platforms and tools, visit etrade.com.

For useful insight from E*TRADE and third-party investment professionals, follow the Company on Twitter, @ETRADE.

About the Survey

This wave of the survey was conducted from October 1 to October 10 of 2016 among an online U.S. sample of 954 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.18 percent at the 95 percent confidence level. It was fielded and administered by ResearchNow. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month) and passive (trade less than once a month). The panel is 65 percent male and 35 percent female with an even distribution across online brokerages, geographic regions, and age bands.

Referenced Data

When it comes to the current market are you?
        Q4'16       Q3'16       Q2'16       Q1'16       Q4'15
Bullish       55%       55%       61%       45%       50%
Bearish       45%       45%       39%       55%       50%
If you had to pick a movie title that best describes how you personally feel about the market right now, which would it be?
        Q4'16       Q3'16       Q2'16       Q1'16       Q4'15
Dazed and Confused       30%       40%       31%       33%       38%
Easy Rider       26%       17%       20%       14%       18%
Pulp Fiction       12%       12%       12%       13%       12%
Singin' in the Rain       11%       9%       13%       7%       9%
Raging Bull       7%       5%       6%       4%       5%
Fear and Loathing in Las Vegas       6%       8%       8%       11%       7%
Jackass       6%       5%       6%       7%       6%
Apocalypse Now       3%       4%       4%       9%       4%

How do you predict the market will end this quarter?

(Question asked beginning in Q1'16)

        Q4'16       Q3'16       Q2'16       Q1'16
Rise       54%       41%       59%       34%
Rise 20%       1%       1%       1%       0%
Rise 15%       2%       1%       2%       3%
Rise 10%       8%       5%       9%       10%
Rise 5%       44%       34%       47%       21%
Stay basically where it is       22%       28%       21%       20%
Drop 5%       19%       24%       16%       23%
Drop 10%       4%       6%       4%       16%
Drop 15%       1%       1%       0%       5%
Drop 20%       0%       0%       0%       2%
Drop       24%       31%       20%       46%
Is the U.S. economy healthy enough for the Fed to enact additional rate hikes this quarter?
        Q4'16       Q3'16       Q2'16       Q1'16
Agree (Top 2 Box)       53%       33%       41%       47%
Strongly agree       12%       6%       9%       7%
Somewhat agree       41%       27%       32%       40%
Neither agree nor disagree       27%       30%       29%       27%
Somewhat disagree       15%       28%       20%       19%
Strongly disagree       5%       9%       10%       7%
Disagree (Bottom 2 Box)       20%       37%       30%       26%
How interested are you in each of the following sectors, without taking into account the investment products which you can invest through? (% extremely or very interested)
        Q4'16       Q3'16       Q2'16       Q1'16       Q4'15
Large U.S. companies (large-cap)       47%       47%       46%       42%       45%
Mid-sized U.S. companies (mid-cap)       36%       37%       43%       35%       36%
Small U.S. companies (small-cap)       32%       31%       34%       28%       32%
Domestic bonds/debt       23%       19%       14%       17%       18%
International companies in developed markets (e.g., UK, Germany, Spain, Italy, Greece, France, Japan)       23%       15%       20%       19%       22%
International companies in emerging markets (e.g., Brazil, Russia, India, China, Korea, Malaysia, Mexico)       20%       12%       15%       14%       15%
International bonds/debt issued in developed markets       15%       10%       13%       10%       11%
International bonds/debt issued in emerging markets       17%       9%       9%       10%       11%
What industries do you think offer the most potential this quarter? (Top three)
        Q4'16       Q3'16       Q2'16       Q1'16       Q4'15
Information technology       50%       44%       51%       53%       45%
Health care       45%       54%       56%       60%       57%
Energy       46%       43%       48%       38%       41%
Consumer staples       27%       30%       27%       30%       35%
Utilities       25%       31%       17%       18%       20%
Telecommunication services       27%       26%       24%       26%       22%
Financials       32%       25%       29%       32%       31%
Industrials       17%       16%       19%       16%       14%
Consumer discretionary       17%       15%       17%       15%       20%
Materials       14%       16%       14%       13%       14%

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services, including online brokerage and banking products and services to retail customers. Specific business segments include Trading and Investing and Balance Sheet Management. Securities products and services, including stocks, bonds, mutual funds, options, and ETFs are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, an investment adviser registered with the Securities and Exchange Commission. Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries and affiliates. More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. ETFC-G

E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation.

© 2016 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and ResearchNow are separate companies that are not affiliated. E*TRADE Financial Corporation engages ResearchNow to program, field, and tabulate the study.

About ResearchNow

ResearchNow, a leading digital data collection provider, powers market research insights. They enable companies to listen to and interact with the world's consumers and business professionals through online panels, as well as mobile, digital, and social media technologies. Their team operates in over 20 offices globally and is recognized as the market research industry's leader in client satisfaction. They foster a socially-responsible culture by empowering their employees to give back. To find out more or begin a conversation, visit www.researchnow.com.

E*TRADE Media Relations
Thayer Fox, 646-521-4418
E*TRADE Investor Relations
Brett Goodman, 646-521-4406

Source: E*TRADE Financial Corporation



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