The PNC-CivicScience Investor Sentiment Index (“ISI”) is a “living,” survey-based measurement of U.S. adults’ current attitudes and expectations related to the U.S. financial markets, investment climate, and market outlook. The primary goal of the ISI is to monitor changes in consumer and investor attitudes, to better anticipate investment trends, market movements, and overall U.S. economic health.
A Snippet of Our Latest Reading:
The PNC-CivicScience Investor Sentiment Index (ISI) strengthened for the third month in a row in December 2017, and reflects a sharp turn higher in the latter months of the year, indicating growing optimism. As measured by the poll, investor confidence strengthened in the final quarter of 2017, after a downward softening trend had prevailed during the first nine months of the year. Sentiment began moving higher in October, and again in the following two months. The December reading indicated a jump in sentiment, reaching the highest level recorded in 2017. The ISI moved sharply higher to 54.3 in December, up from 51.7 in November. The November sentiment reading was just slightly below the prior high readings for the year, noted in January and March, both at 51.8. Optimism growing through the fall appears to reflect broader market views and optimism in the economy, ongoing legislation on tax reform, and strong financial markets. With global growth continuing in December, in addition to the passing of tax reform legislation in the United States, financial markets traded higher, and the ISI poll would suggest optimism rose as well. Volatility in 2017 was the lowest on record as measured by futures markets which assess trading statistics of the S&P 500®, despite the many headlines financial markets needed to digest. Despite geopolitical risks, uncertainty regarding the outcome of tax reform, uneven economic data, and other factors, domestic U.S. indexes continued to test new all-time record highs as the year came to an end. The economy quickly bounced back from the severe hurricane storm season. Third-quarter 2017 GDP was 3.2%, and the estimate for fourth quarter GDP is currently 3.2% as well. The job market remains on solid ground, with the unemployment rate holding at 4.1% for December. As expected, the Federal Reserve (Fed) raised interest rates for the third time in 2017 at the December meeting, and PNC expects the Fed will raise interest rates three times in 2018, all at a measured pace of 25 basis points at each meeting.
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