Retail Traders Are Extra Bullish: Charles Schwab Survey Shows 52% Eye Single Stock Purchases In Q1

Zinger Key Points
  • Over half of retail traders bullish on U.S. stock market for Q1 2024, reaching a survey peak since 2021.
  • 48% of traders believe the U.S. will avoid recession in 2024, doubling confidence from last quarter.

The latest Charles Schwab Trader Sentiment Survey unveils a significant shift towards optimism among retail traders, with over half displaying a bullish stance on the U.S. stock market for the first quarter of 2024. This sentiment marks a notable rise in confidence, reaching its peak since the survey’s inception in 2021.

The survey, capturing the perspectives of Charles Schwab traders, highlights that 53% of participants hold a bullish outlook for the U.S. stock market, a sharp increase from the 32% recorded in the final quarter of the previous year.

The optimism is also reflected in the 49% of traders who now believe it’s an opportune time to invest in equities, marking a rise from 41% in the last quarter.

Traders’ perspectives on the economy have also seen a positive adjustment, with nearly half (48%) opining that the U.S. is likely to sidestep a recession in 2024, a significant leap from 23% in the previous quarter.

Despite the uplift in sentiment, traders remain wary of geopolitical tensions and the macroeconomic landscape, with these factors topping their list of concerns. However, the survey also reveals a record high in traders’ confidence in their decision-making, standing at 68%.

Primary Concerns

Concern1Q ‘244Q ‘233Q ‘232Q ‘231Q ‘23
Geopolitical or global macroeconomic issues18%5%8%10%9%
Political landscape in D.C.16%21%13%13%12%
Market correction9%8%10%7%6%
Uncertainty/potential increase in volatility9%7%7%6%7%
Potential of a recession9%11%14%18%15%
Inflation9%11%10%8%12%
Fed holding rates steady6%3%1%n/an/a

Sector and Asset Class Outlook: Traders show a clear preference for information technology (55%), as tracked by the Technology Select Sector SPDR Fund XLK; healthcare (51%) and energy (46%) sectors.

Conversely, real estate (41%) and consumer discretionary (35%) sectors are viewed with skepticism. AI stocks (61%) and value stocks (54%) are among the favored investment choices, while international stocks (35%), U.S. Treasuries (33%), and cryptocurrencies (32%) are less popular.

Portfolio Changes: The survey also sheds light on traders’ future investment plans, with a significant number leaning towards individual stocks and ETFs in the coming months.

Portfolio Changes Planned in Next 3 Months
Action1Q ‘244Q ‘23
Move money into individual stocks52%45%
Move money into ETFs39%33%
Move money into fixed income27%26%
Move money into cash investments20%23%

Now Read: Nvidia Market Cap Nears $2 Trillion: Why ‘Tech Giant’ Has Become An Understatement

Image generated using AI via Midjourney

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