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 (PNC-CS ISI) moderated in June, reflecting cooler optimism than in May. Investor optimism, as measured by the poll, had been steadily rising from September 2017 through January 2018. After peaking in January, sentiment began to fade and declined in each of the next three consecutive months. In May, the poll results rebounded off of April’s low reading, before easing a bit in June. The June 2018 results reflect a slight softening in optimism from poll participants, after May’s sharp rise higher. The ISI moderated to 50.5 in June, from 51.2 for May (Chart 1). Trade war uncertainties drove market volatility higher in June after the United States announced additional tariffs on Chinese goods. Trade headlines were constant through the month, as announced tariffs were quickly met with threats of retaliation. Beyond the United States, global markets also sold off in response to trade policy uncertainties. However, fundamentals remain sound as the U.S. economy continues to expand and the corporate profit outlook for domestic companies this year indicates robust growth. U.S. financial markets were strong out of the gate in January 2018, after tax reform legislation was passed in late 2017. Volatility returned to the markets in February after an extremely sanguine 2017. A number of uncertainties had markets trading lower, and the S&P 500® fell through a 10% correction point. It is normal for stocks to experience declines from time to time, and as U.S. equities had gone longer than normal without having had any type of correction, a 10% correction was not unwarranted. Stocks have recovered some of what was lost, despite ongoing headline uncertainties and volatility, and markets are back in positive territory for the year. The S&P 500 is up 1.7% on a year-to-date basis through June 30, 2018. Including the reinvestment of dividends, the S&P 500 total return is 2.6%.
