Economic outlook improved by 50% since the election with more
than half of investors actively looking for investment
opportunities
Key findings:
- 68% of investors expect strong
returns in the stock market
- 55% of investors are actively
looking for investment opportunities
- 30% are considering taking cash off
the sidelines
- 41% of small business owners plan to
invest more in business
- 30% of small business owners plan to
increase hiring
- 84% of small business owners would
like to see the Affordable Care Act revised or eliminated
UBS Wealth Management Americas (WMA) today released its
quarterly UBS Investor Watch report, “The Revived Investor,” which
revealed the highest levels of investor optimism since the 2008
financial crisis in anticipation of President-elect Trump assuming
office on January 20. Investors cited Trump’s pro-business policies
(71%) – including lower personal and corporate taxes – expectations
for less regulation and increased infrastructure spending (69%),
which they believe will spur U.S. economic growth, as the primary
sources of their optimism.
Importantly, Investor Watch found that investors’ outlook on the
economy, their top concern during the 2016 Presidential election,
has improved by 50% since Trump was elected. Additionally, 68% of
investors said they expect Trump’s policies to lead to strong stock
market returns over the next six months. As a result, the majority
of investors (55%) are actively looking for investment
opportunities, up from 34% immediately following the election, with
42% likely to increase their investments in the stock market and
nearly one-third of wealthy investors (30%) ready to deploy
cash.
The report includes a survey of small business owners, which
shows their outlook on the economy has also improved in
anticipation of expected policy changes and they plan to invest
more in their businesses and increase hiring.
"After years of caution following the financial crisis, we are
finally seeing the tide turn. Investors are more willing to move
cash off the sidelines and increase investments, while business
owners are set to increase capital spending and hiring," said Paula
Polito, Client Strategy Officer of WMA. "If the recent optimism
continues, it will bode well for the markets and the economy."
Investors’ outlook for the stock market is even more optimistic
than it is for the economy. While President-elect Trump supporters
are more likely than Clinton supporters to be optimistic about
S&P 500 returns in the next six months (90% vs. 44%), stock
market optimism across party lines has increased from 25% before
the election to 68% in January.
Investor optimism at its highest since financial crisis… but
doubt remains
Investor optimism is at its highest point since the financial
crisis. President-elect Trump supporters’ economic outlook has
improved from 25% prior to the election to 79% post-election.
Clinton supporters’ confidence declined immediately after the
election (34%, down from 57% prior to the election), but has since
started to recover (41% now). The vast majority of Clinton
supporters continue to be wary of Trump’s unpredictability (87%)
and his potential business conflicts (80%), and the impact they can
have on social issues and America’s standing in the global
competitive environment.
"Investors have high expectations of the new administration,
particularly with regard to deregulation, infrastructure spending
and tax reform," said Sameer Aurora, head of Client & Investor
Insights for WMA. "These expectations are fueling a sharp rise in
optimism and prompting investors to put more of their money to
work."
Small business owners spotlight – plans to invest and
increase hiring
Similar to high net worth investors, the survey of small
business owners found that this group believes they will see
significant growth opportunities under the Trump Administration.
Consequently, 41% percent of small business owners said they plan
to invest more in their businesses and 30% say they intend to
increase hiring, compared to the 14% who plan to downsize their
workforce and 18% who say they will invest less in their
businesses.
In terms of their concerns, UBS revealed that the majority of
business owners (62%) are worried about overregulation. Reducing
healthcare costs is the top priority for business owners (50%),
followed closely by infrastructure investment (49%), easing
regulation to allow businesses to grow (47%), reducing terrorism
(44%), lowering taxes (43%) and breaking the gridlock in Washington
(42%). In terms of action, the vast majority (84%) would like to
see the Affordable Care Act revised or eliminated, while 53%
indicate that banking regulations have made it more difficult to
borrow money to invest in their businesses. More than half (55%) of
business owners say reducing government regulations would help
their businesses.
That being said, optimism and expectations among business owners
appear to be high, as most believe President-elect Trump will
address their significant issues during his first 100 days in
office. Four out of five small business owners expect the U.S.
regulatory environment to ease, while two out of five expect their
taxes to decrease.
About UBS Investor Watch
UBS Wealth Management Americas surveys U.S. investors on a
quarterly basis to keep a pulse on their needs, goals and concerns.
After identifying several emerging trends in the survey data, UBS
decided in 2012 to create the UBS Investor Watch to
track, analyze and report the sentiments of affluent and high net
worth investors. To download this report or review others, please
visit ubs.com/investorwatch.
Methodology
For this eighteenth edition of UBS Investor Watch, 2,025 high
net worth investors responded to our survey from December 20 - 27,
2016. All respondents have at least $1 million in investable
assets, including 412 with at least $5 million. We also included an
oversample of 282 business owners who have at least one employee
besides themselves. With 81 survey respondents, we conducted
qualitative follow-up interviews.
Notes to editors
About UBS Wealth Management Americas
Wealth Management Americas is one of the leading wealth managers
in the Americas in terms of financial advisor productivity and
invested assets. Its business includes UBS’s domestic US and
Canadian wealth management businesses, as well as international
business booked in the US. It provides a fully integrated set of
wealth management solutions designed to address the needs of
ultra-high net worth and high net worth clients.
About UBS
UBS provides financial advice and solutions to wealthy,
institutional and corporate clients worldwide, as well as private
clients in Switzerland. The operational structure of the Group is
comprised of our Corporate Center and five business divisions:
Wealth Management, Wealth Management Americas, Personal &
Corporate Banking, Asset Management and the Investment Bank. UBS’s
strategy builds on the strengths of all of its businesses and
focuses its efforts on areas in which it excels, while seeking to
capitalize on the compelling growth prospects in the businesses and
regions in which it operates, in order to generate attractive and
sustainable returns for its shareholders. All of its businesses are
capital-efficient and benefit from a strong competitive position in
their targeted markets.
UBS is present in all major financial centers worldwide. It has
offices in 54 countries, with about 34% of its employees working in
the Americas, 35% in Switzerland, 18% in the rest of Europe, the
Middle East and Africa and 13% in Asia Pacific. UBS Group AG
employs approximately 60,000 people around the world. Its shares
are listed on the SIX Swiss Exchange and the New York Stock
Exchange (NYSE).
UBS.com/investorwatchubs.com/mediaFollow us on
Twitter: @UBS
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version on businesswire.com: http://www.businesswire.com/news/home/20170118005565/en/
MediaFor UBS Wealth Management AmericasMaya Dillon,
+1-212-713-3130maya.dillon@ubs.com
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