Q3 survey reveals young investors are more optimistic about equity markets

Geopolitical tensions are of the most concern

A significant portion of clients identified geopolitical tensions (42.9%) and interest rates (37.1%) as the primary factors likely to influence their investment strategies over the next three months. The looming US election also plays a crucial role, with 32.8% of respondents considering it a significant influence.

“Geopolitics can always be a source of volatility, so our clients should be following the news closely to adjust and diversify their portfolios accordingly. The same goes for a major event like the US election, where we have two candidates who have differing stances that could impact different sectors. We’re monitoring the election closely through our US Election news centre, to make sure our clients are as knowledgeable as possible when the time comes about how the US election can impact investment portfolios,” says Peter Garnry, Chief Investment Strategist at Saxo.

These concerns underscore the heightened uncertainty in the global market, where political and economic events dictate investor sentiment and strategy adjustments.

Younger investors are more optimistic on market performance

When reviewing the answers of almost 2,300 clients on whether they believe global equity markets will increase or decrease, there’s a clear trend that different ages have different perspectives.

Although more clients in the age ranges of 76+ still believe the markets will increase, they remain the demographic group with most clients opting for the equity market to decrease, while nearly 60% of those below 35 remain optimistic on equities.

Sector Performance Predictions

When it comes to sector performance, respondents have identified key areas they believe will outperform. Below is a breakdown of the different sectors

Most optimistic sector: Information Technology
Dominating the expectations, 32.2% of respondents see this sector as the top performer, driven by ongoing digital transformation and technological advancements. This is a minor dip in optimism since last quarter, when 33.7% of respondents pushed for IT.

Biggest Jump in optimism: Health Care
16.1% of clients favour health care as a sector that is likely to outperform. This is a jump of 168% of last quarter’s 6%. Peter Garnry isn’t surprised by this, having created an investment theme around new biotech a couple of years back. “The health care sector has always been interesting to watch, as it continues to provide a lot of innovation. Recently, Novo Nordisk, and competitors like Eli Lilly, have made a global media impact with their respective weight-loss drugs, bringing the entire sector to the front of investors’ minds.”

Biggest drop: Energy
Last quarter, the energy sector was the second most selected sector believed to perform the best in Q2 with 17.4% of client votes. However, this quarter saw the sector optimism drop by 63%, chosen only by  6.4% of clients. This moves the energy sector down the rankings from second to fifth.

Regional Outlook

In terms of regional performance North America remains as the region clients believe will perform the best in Q3 (47.6% of respondents). However, Europe has grown in optimism, going from the market predicted to perform the worst behind emerging markets, to jumping by 143% to a second place behind North America.

About the survey:
The purpose of the Client Sentiment Survey was to gain insights into the expectations of Saxo’s clients for the upcoming quarter. The survey was distributed to Saxo clients  between 06/06/2024-18/06/2024 and consisted of 2,299 respondents. The survey was executed in English, French, Dutch and Danish and sent to clients in the respective language markets.

If you want to dig deeper into the survey, you can find all the survey data here.