Optimism for global equity markets has dipped, with a divergence of conviction over the direction of markets in Q4, according to Saxo’s quarterly Client Sentiment Survey.
Overall, the survey suggested that optimism for global equity markets has softened compared to Q3. While 40.6% of respondents expect markets to increase in the final three months of the year, it is down from 42.1% in Q3 and 50.5% in Q2.
The largest increases were seen in the ‘big increase’ and ‘big decrease’ responses, at 5.6% and 8.4% respectively.
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“We’re seeing a greater division of clients’ conviction about the markets, which makes sense given the increase in geopolitical risk and the upcoming US election in November,” said Saxo chief investment strategist Peter Garnry.
Some 52% believe that geopolitical tensions will affect their investment strategy over the next three months, while 47.3% expect the US election to impact their portfolio.
“The sustained concerns about geopolitical tensions align with ongoing global conflicts and economic sanctions, while rising interest rates and inflation remain key risks for global markets,” Garnry added.
“We also get closer to the US election – now less than a month away – and as such it seems relevant that geopolitical tensions, the election and interest rates are among investors top concerns.”
By sector, Saxo’s clients have tipped information technology to top performance charts over the next three months. However, this was down to 20.6% of clients, a drop from 32.2% backing the sector in Q3.
While half of clients expect North America to lead returns in the quarter, 47.1% believe Europe will perform the worst.
