Investors are considering allocation pivots as market sentiment improves
Chris Larkin, managing director and head of trading and investing at E*TRADE from Morgan Stanley, tied the shift to a market that is no longer leaning so heavily on a handful of technology names.
“Morgan Stanley’s Global Investment Office has noted the market is showing signs of broadening beyond its narrow tech base, which means investors are looking far and wide for new investing opportunities,” Larkin said. “So they’re not standing still. Despite persistent inflation concerns, investors remain open to shifts in market leadership and are increasingly looking beyond traditional markets.”
Sector picks
Technology remained the sector investors see as offering the most potential this quarter, with 57% naming it their top pick, essentially unchanged from the previous quarter and still driven largely by enthusiasm for artificial intelligence.
Energy slipped to second place at 43%, down from 49% last quarter, a decline the survey attributes to geopolitical uncertainty weighing on the sector. Health care held steady in third at 34%, down a single point, which the survey suggests may reflect investors gravitating toward areas that have historically held up better during volatile stretches.
Overall bullishness climbed to 62% this quarter from 56% in the second quarter, and 66% of investors now expect the market to finish the quarter higher, up from 55% previously.
