Ally Invest Quarterly Survey Results: Nearly 40% of Respondents More Bullish This Quarter Than Last About Near Term Market Outlook
Despite Market Highs, Survey Suggests Investors Still See Room at the Top to Grow
Jan 18, 2018
-- Corporate earnings growth a top reason for continued optimism
-- International unrest continues to be investors' top market concern
-- Majority of investors anticipate FAANG earnings to meet or exceed street expectations
SANDY, Utah, Jan. 18, 2018 -- Investors continue to be predominately bullish or very bullish on market performance, according to the latest Ally Invest quarterly survey of independent investors. Bullish/very bullish sentiment rose from 55 percent in the previous quarter to 76 percent this quarter, suggesting that even with recent market highs, investors still see room at the top for continued growth. Further, investors remain largely positive about upcoming FAANG (Facebook, Amazon, Apple, Netflix, Google) earnings, with investors showing particular confidence in Amazon's results exceeding street expectations.
The results of the in-house survey, conducted January 4-9, 2018 by Ally Invest, are based on responses from 385+ independent investors.
Bull - Bear Sentiment
The quarterly survey showed 61% of investors have a bullish market outlook (vs. 49% last quarter) and 15% are very bullish (vs. 6% last quarter), with just 3% of investors reporting a bearish or very bearish view (down from 12% the last quarter). Investors point to corporate earnings (71% of respondents) and accelerating growth (44%) as particular market drivers. However, investors continue to keep a close eye on potential market concerns, including somewhat lessened concerns about international unrest (42% this quarter vs. 54% last quarter), with concerns about slowing year-over-year growth and weakening of the U.S. dollar tied at 17% of respondents.
Optimistic Outlook for FAANG Earnings
When asked "What is your outlook for each of the 'FAANG' stocks for the fourth quarter?," the majority of investors believe again this quarter these companies will either meet or exceed street expectations with bullish sentiment the strongest on Amazon and the weakest on Apple and Netflix. Here is how response for the FAANG stocks compared:
- Facebook (meet street expectations: 31%, exceed street expectations 29%)
- Amazon (meet street expectations: 19%, exceed street expectations: 41%)
- Apple (meet street expectations: 35%, exceed street expectations: 27%)
- Netflix (meet street expectations: 33%, exceed street expectations: 27%)
- Google (meet street expectations: 28%, exceed street expectations: 38%)
Investors Watching a Variety of Trade Triggers for FAANG Stocks
When asked, "Which trade triggers are you watching most closely for each of the 'FAANG' stocks?," investors offered a range of responses, though ongoing annual revenue growth was among the top three triggers cited by all investors surveyed.
- Facebook: The social network's advertising revenue was cited as the top investor response (19%), followed by year-over-year revenue growth (12%) and year-over-year EPS growth and the number of active users/subscribers tied for third (11%).
- Amazon: Investors likewise pointed to year-over-year revenue growth as the top trade trigger (28%), followed by year-over-year EPS growth (12%) and gross margins (7%).
- Apple: Apple's enduring reputation for innovative consumer products continues to be its calling card, with investors pointing to new product launch(es) as a top trade trigger (18%), followed by product sales by category (16%) and year-over-year revenue growth (12%).
- Netflix: The number of active users/subscribers was Netflix's top trade trigger (29%), followed by year-over-year revenue growth (10%) and year-over-year EPS growth (9%).
- Google: Ad revenue was the top Google trade trigger (18%) followed closely by year-over-year revenue growth (17%), with year-over-year EPS growth (9%).
Results of the survey are for informational purposes only and not intended as investment advice. Investing involves risk. Thus, before investing you should consider what is suitable given your particular circumstances or seek professional advice.
About Ally Financial Inc.
Ally Financial Inc. (NYSE: ALLY) is a leading digital financial services company and a top 25 U.S. financial holding company offering financial products for consumers, businesses, automotive dealers and corporate clients. Ally's legacy dates back to 1919, and the company was redesigned in 2009 with a distinctive brand, innovative approach and relentless focus on its customers. Ally has an award-winning online bank (Ally Bank Member FDIC, Equal Housing Lender) offering deposits, credit card and home loan products, one of the largest full service auto finance operations in the country, a complementary auto-focused insurance business, a growing wealth management and online brokerage platform, and a trusted corporate finance business offering capital for equity sponsors and middle-market companies.
The company had approximately $164 billion in assets as of September 30, 2017. For more information, visit the Ally press room at http://media.ally.com or follow Ally on Twitter: @AllyFinancial.
Securities products and services are offered through Ally Invest Securities LLC, member FINRA and SIPC. Investment advisory services are offered through Ally Invest Advisors Inc., an SEC registered investment adviser. Ally Invest Advisors Inc. and Ally Invest Securities LLC are wholly owned subsidiaries of Ally Invest Group Inc. Investments are NOT FDIC INSURED, NOT BANK GUARANTEED and MAY LOSE VALUE.
Andrea Puchalsky at Ally
Kathy Wilson at Tier One Partners