Advisors not bullish on stocks: survey

Over the last few months, Canadian advisors have become less enthusiastic about the stock market, says a survey by Horizons Exchange Traded Funds Inc.

Bullish sentiment on the S&P/TSX 60 declined from 59% in Q2 to 54% in Q3, and on the S&P 500 from 63% to 58%. Also, on the NASDAQ 100, confidence dropped from 65% to 59%.

The biggest dip occurred on the MSCI Emerging Market Index, from 59% to 48%.

“Emerging market equities have historically been more volatile than developed nation stocks, so it would stand to reason that bearish sentiment has increased more dramatically,” says Howard Atkinson, CEO of Horizons ETFs.

Read: Equities: Time to buy or bail?

Bullish sentiment on commodities increased, however. The most remarkable turnaround was on natural gas, which surged 18 percentage points. This comes in the wake of a 32.83% increase in gas prices.

Sentiment on crude oil also jumped up, despite the fact oil declined 17.53%.

Advisors remain bullish on precious metals—gold increased by5%; and silver by 4%. They favour gold stocks the most (11%), even after the S&P/TSX Global Gold Stock Index lost 9.53% last quarter.

“Advisors may feel these two metals are now undervalued after being beaten up last quarter,” adds Atkinson.

Read: European volatility masks opportunity

Sentiment on the loonie is also moving from neutral to bearish, increasing from 18% to 31%. More advisors expect a pullback in the value of the loonie versus the U.S. dollar.

And more than half of advisors (54%) remain neutral about government bonds represented by the U.S. 30-year treasuries. Read: Where to find better bond yields

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.