Independent investors have a bullish outlook about the near-term market, according to a new quarterly client survey.
The survey by Ally Invest, based in Midvale and part of Ally Financial Inc., indicates that 55 percent of survey respondents are bullish or very bullish on the near-term market. The top three factors for that sentiment are a favorable U.S. business climate, including corporate earnings; continued low interest rates and accelerating growth, according to the survey.
Nearly 49 percent said they have a bullish outlook and nearly 6 percent are very bullish. Less than 12 percent reporting a bearish or very bearish view. But investors said they are keeping a close watch on potential market concerns, including international unrest (54 percent), slowing year-over-year growth (32 percent) and the potential for higher interest rates (28 percent).
The majority of investors expected earnings from Facebook, Amazon, Apple, Netflix and Google — collectively referred to as FAANG — to meet or exceed Wall Street expectations, with Amazon topping the list for strong year-over-year earnings. Twenty-five percent of respondents said Amazon will meet expectations and 36 percent said the company would top expectations.
The remainder of the FAANG list: Facebook, 42 percent to meet expectations, 23 percent to exceed them; Apple, 33 percent to meet and 27 percent to exceed; Netflix, 33 percent to meet and 26 percent to exceed; and Google, 36 percent to meet and 29 percent to exceed.
Investors had a variety of trade triggers they watch for FAANG stocks. Year-over-year revenue growth was the top investor response for Facebook (16 percent), Amazon (24 percent) and Google (18 percent). The top response for Apple was new product launches (25 percent). The top trade trigger for Netflix was the number of active users/subscribers (32 percent).
Other top triggers for the FAANG companies were ad revenue and the number of active users/subscribers for Facebook, year-over-year earnings-per-share (EPS) growth and gross margins for Amazon; product sales by category and year-over-year revenue growth for Apple; year-over-year revenue growth and EPS growth for Netflix; and ad growth, year-over-year EPS growth and new product launches for Google.
The in-hour survey was conducted Oct. 5-8 and results are based on responses from more than 390 independent investors.
Ally Invest Group Inc. offers investment brokerage and advisory services to investors through its wholly owned subsidiaries: Ally Invest Advisors Inc. and Ally Invest Securities LLC.