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E*TRADE Study Reveals Bullish Sentiment Has Fallen to Two-Year Low

Apr 13, 2018

Regarding market performance, less than half of surveyed investors believe the market will end in positive territory, down 31 percentage points from Q1'18 

NEW YORK--(BUSINESS WIRE)--Apr. 13, 2018-- E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results indicate a significant decline in positive investor sentiment:

  • Bullish sentiment decreased to 52 percent, a 16 percentage point decline from Q1’18 and an 11 percentage point decline from Q2’17.
  • Almost three out of five investors believe the US economy is healthy enough for at least one rate hike in the second quarter, down 8 percentage points from Q1’18 and 4 percentage points from Q2’17.
  • Just under half believe the market will rise this quarter, down 31 percentage points from Q1’18, and 9 percentage points from Q2’17.

“After a 2017 defined by record-breaking highs, volatility now seems to be the name of the game,” commented Mike Loewengart, VP of Investment Strategy at E*TRADE Financial. "This shouldn’t come as too much of a surprise given trade tensions with China, tech stocks taking one on the chin amid data privacy issues, and some jobs data coming in at the end of the quarter as a bit of a mixed bag. But all that being said, economic fundamentals remain strong as we enter earnings season, and, in taking a long-term view, many equities may be considered bargains by historical standards.”

The survey also explored retail investors’ thoughts regarding potential investing opportunities for the first quarter:

  • Health care. Nearly half of all investors believe the health care sector offers potential in Q2, up 5 percentage points from the previous quarter. Investor interest in the sector is at its highest point in more than a year, perhaps due to investors viewing the industry as traditionally defensive but without the interest rate exposure of other defensive sectors like telecom and utilities.
  • IT. Despite taking some recent lumps in March, interest in IT remains steady, with 44% of surveyed respondents drawn to the sector. Amid a pronounced pullback in the sector, many investors may be eyeing bargain opportunities on stocks that have witnessed historically high valuations during the recent bull run.
  • Energy. While the energy sector started the year as one of the worst performing sectors, its recent resurgence has investors taking note amid a tightening of international supplies. Although interest in the sector declined from Q1, surveyed investors continue to rate it high in potential this quarter compared to other sectors.

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About the Survey

This wave of the survey was conducted from April 1 to April 11 of 2018 among an online US sample of 947 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 Research Now. 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 64 percent male and 36 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?
                      Q2’18       Q1’18       Q4’17       Q3’17       Q2’17
Bullish                     52%       68%       63%       60%       63%
Bearish                     48%       32%       37%       40%       37%
How do you predict the market will end this quarter?
                      Q2’18       Q1’18       Q4’17       Q3’17       Q2’17
Rise                     46%       77%       66%       61%       55%
Rise 20%                     2%       2%       2%       1%       0%
Rise 15%                     3%       7%       6%       3%       4%
Rise 10%                     11%       18%       16%       14%       13%
Rise 5%                     30%       50%       42%       43%       38%
Stay basically where it is                     17%       14%       17%       21%       23%
Drop 5%                     21%       7%       11%       13%       16%
Drop 10%                     12%       2%       4%       4%       4%
Drop 15%                     3%       0%       2%       0%       2%
Drop 20%                     1%       0%       0%       1%       0%
Drop                     37%       9%       17%       18%       22%
Is the US economy healthy enough for the Fed to enact additional rate hikes this quarter?
                      Q2’18       Q1’18       Q4’17       Q3’17       Q2’17
Agree (Top 2 Box)                     58%       66%       59%       58%       62%
Strongly agree                     17%       20%       17%       14%       16%
Somewhat agree                     41%       46%       42%       44%       46%
Neither agree nor disagree                     25%       25%       27%       24%       26%
Somewhat disagree                     13%       7%       12%       15%       10%
Strongly disagree                     4%       2%       2%       3%       2%
Disagree (Bottom 2 Box)                     17%       9%       14%       18%       12%
What industries do you think offer the most potential this quarter? (Top three)
                      Q2’18       Q1'18 Q4’17       Q3'17       Q2'17
Health care                     46%       41% 43%       41%       39%
Information technology                     44%       45% 46%       45%       46%
Energy                     41%       47% 44%       46%       45%
Financials                     40%       43% 39%       43%       39%
Telecommunication services                     24%       23% 27%       24%       24%
Consumer staples                     24%       17% 20%       20%       20%
Utilities                     22%       19% 22%       24%       23%
Industrials                     22%       29% 22%       24%       28%
Materials                     20%       21% 20%       20%       20%
Consumer discretionary                     18%       15% 16%       16%       15%

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are national federal savings banks (Members FDIC). More information is available at

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

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

© 2018 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and Research Now are separate companies that are not affiliated. E*TRADE Financial Corporation engages Research Now to program, field, and tabulate the study. Research Now Group, Inc. provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to


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