Schwab Q3 Survey: 44% Bullish on U.S. Stock Market and 66% See AI as a Significant Market Impact

The Charles Schwab Trader Sentiment Survey for Q3 reveals a shift in trader expectations towards a more optimistic view of the market environment. After two consecutive quarters of heightened recession anticipation, the latest survey indicates a brighter outlook among traders.

Key Findings

  1. For the upcoming three months, 44% of traders are bullish about the U.S. stock market, a significant increase from 32% in Q2. Conversely, bearish sentiment has decreased from 52% in Q2 to 35%.
  2. Although 69% of Schwab’s trader clients believe a U.S. recession is likely, this figure has dropped from 86% in Q2 and 87% in Q1. Among those expecting a recession, 64% now forecast its onset in Q4 2023 (26%) or later (38%). This is a notable shift from the previous quarter, where only 19% predicted a recession in the same timeframe.
  3. Primary Concerns Around Investing: Traders have expressed concerns about the potential of a recession (14%), the Federal Reserve raising interest rates (14%), the political landscape in D.C. (13%), inflation (10%), and market corrections (10%).
  4. The survey, which captures the perspectives of traders at Charles Schwab and TD Ameritrade, delves into primary concerns around investing, the likelihood and expected duration of a recession, and economic data influencing outlook. For instance, 77% of traders are influenced by inflation, 63% by consumer spending, and 55% by the labor market.

James Kostulias, head of Trading Services at Charles Schwab, commented on the findings, stating, “While traders certainly don’t feel we’re entirely out of the woods yet when it comes to an economic downturn, we’re seeing an influx of cautious optimism.” He attributed this optimism to a robust jobs market and relatively low unemployment rates. Despite a slight increase in inflation, it remains significantly lower than the highs of 2022.

Demographic Insights

Older traders are more bullish at 49%, compared to 41% for younger traders and 38% for retirees.

51% of traders believe it’s a favorable time to invest in stocks and other equity-based investments, an increase from 41% in Q2. Moreover, 53% feel they are in a better financial position than a year ago, a jump from 36% in the previous quarter.

Sector and Asset Class Perspective

Traders are most bullish on the energy, information technology, and health care sectors. Real estate is the only sector where the majority (54%) are bearish.

On the asset class front, traders show bullishness towards value stocks, domestic stocks, growth stocks, and equities in general.

AI’s Role in Trading

Artificial Intelligence (AI) is gaining traction in traders’ decision-making. 66% of traders believe AI will have a significant impact on the market in the next 1-3 years. Furthermore, 35% are already incorporating a company’s use of AI in their stock analysis, and 51% are bullish on AI stocks for the next quarter.

The Charles Schwab Trader Sentiment Survey is a quarterly study that included 768 Active Trader clients at Charles Schwab and TD Ameritrade, conducted from July 6 – August 3, 2023.

Image source: Shutterstock


Tagged : / / / /

Schwab to List Its First Crypto-Related ETF on NYSE

Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, an US multinational financial services company based in California, on Friday, announced the launch of its first crypto-related exchange-traded fund (ETF) called the Schwab Crypto Thematic ETF (NYSE Arca: STCE).

The giant asset manager said that the crypto ETF will be listed on New York Stock Exchange Arca as from 4th August.

According to the report, the ETF will trade under the ticker STCE and is designed to track Schwab’s Crypto Thematic Index.

The Schwab’s EFT will not directly invest in or track digital assets, rather it is designed to provide investors with exposure to firms that are investing in or trading cryptocurrency or other digital assets.

David Botset, Managing Director, Head of Equity Product Management and Innovation at Schwab Asset Management, talked about the development: “For investors who are interested in cryptocurrency exposures, there is a whole ecosystem to consider as more companies seek to derive revenue from crypto directly and indirectly. The Schwab Crypto Thematic ETF seeks to provide access to the growing global crypto ecosystem along with the benefits of transparency and low cost that investors and advisors expect from Schwab ETFs.”

As one of the largest providers of ETFs in the United States, Schwab Asset Management has more than a decade of experience managing ETFs and a robust capital markets team that plays a crucial role to ensure the Schwab ETFs function efficiently.

Schwab also has a wide history in indexing. The financial institution launched its first proprietary index, the Schwab 1000 Index®, in 1991.

Why Crypto ETFs Continued Rising

Cryptocurrencies have continued to uphold their reputation despite volatility in recent months. So far, crypto users have more investment options than ever before as the list of cryptocurrency exchange-traded funds (ETFs) continues to expand.

In October 2021, the ProShares Bitcoin Strategy ETF’s (BITO) kicked off the launch of a series of new funds coming to market. The SEC had been hesitant to approve Bitcoin ETFs before that.

Schwab has joined a wide list of various financial institutions, including BlackRock, and Fidelity, among others that recently released their crypto-related exchange-traded products.

The increasing launches are driven by huge interest from institutional investors and the ability to trade them in regulated stock markets.

Image source: Shutterstock


Tagged : / / / /
Bitcoin (BTC) $ 37,826.13 0.89%
Ethereum (ETH) $ 2,037.01 1.17%
Litecoin (LTC) $ 69.72 0.49%
Bitcoin Cash (BCH) $ 222.39 0.80%