Higher U.S. Stocks Expected in 2017 by Most in Bloomberg Poll

  • More Americans say they’re optimistic about their finances
  • Federal Reserve viewed favorably by half of American adults

Trading on Donald Trump's Trade, Economic Policies

A majority of American adults -- 54 percent -- are bullish on the U.S. stock market for 2017 and almost four in 10 say they anticipate being in a better financial situation during the upcoming year than they are now.

The latest Bloomberg National Poll shows growing optimism about the U.S. economy following the election of billionaire businessman Donald Trump as president, with positive feelings about the nation’s financial direction among his supporters.

“It seems like it will be more business-friendly,” said Anna Wheelahan, 49, a data entry worker for a golf equipment company who voted for Trump and lives in Mission Viejo, California. “People will feel more confident spending their dollars because they will feel safer about their jobs.”

Asked about their 2017 outlook, 38 percent say they expect a better financial year compared with 14 percent who say they’ll be worse off and 45 percent who say their personal fortunes will remain about the same. That’s higher than in December 2012, following President Barack Obama’s re-election, when 31 percent said they were more optimistic for the following year.

“For the past eight years, questions about how the economy is doing have been driven by partisan views,” said pollster J. Ann Selzer, who oversaw the survey. “Republicans were all but in denial about job growth and improvement in the stock market. It will be interesting to see if Hillary Clinton supporters and Democrats follow suit.”

Americans anticipating higher household income outnumbered those expecting a decline -- 39 percent to 10 percent -- while a plurality of 45 percent say they expect their situation to be unchanged. The labor market, where the 4.6 percent unemployment rate reflects a 0.4 percentage point drop during the past year, remains a worry even amid job gains.

Unemployment and jobs is the top issue picked by Americans when presented with seven choices. More than a quarter –- 26 percent – selected it as their biggest concern, followed by health care at 20 percent and terrorism at 15 percent.

The proportion of poll participants picking jobs and the economy as their top issue was as high as 50 percent in December 2010, as the nation’s economy struggled to bounce back from the recession.

Read the poll questions and methodology here.

Asked whether the stock market will be higher or lower at the end of 2017 than it is now, 54 percent said higher, 24 percent said lower, nine percent said about the same and 12 percent weren’t sure.

“It’s going to have an uptick for the next year,” said Scott Carlson, 54, a health insurance company team manager who lives in Tampa, Florida. “I don’t know if it will last beyond that, but that’s my general feeling.”

It should be noted, Selzer said, that most poll participants aren’t stock experts.

“We’re asking them whether they are optimistic or pessimistic about the market,” she said. “They are giving us a sense of their mood. It’s a snapshot in time of how they feel today.”

In the past decade, there have been at least a couple instances where a year of gains in the U.S. stock market followed a December or early January poll where a sizable portion of Americans predicted equities would be up a year later.

In a January 2014 Gallup Poll, 35 percent said stocks would be higher a year later, while 39 percent said about the same and 21 percent said lower. The S&P 500 Index moved up 11.4 percent in 2014.

A December 2009 Gallup Poll had 52 percent saying they expected the market would be higher a year later, while 32 percent said lower and 14 percent said about the same. In 2010, the S&P 500 Index gained 12.8 percent.

Market Prospects

The bullishness extends across all levels of income, with 53 percent of those in the lowest income group -- those having annual household incomes before taxes of less than $50,000 -- saying they are optimistic; that’s about even to the 49 percent of the top income group -- $100,000 or more -- saying the market will end 2017 higher than it is now.

More than three-quarters of those who voted for Trump say U.S. equities will be at higher levels at the end of 2017, while only about a third of those who voted for Clinton think so.

Men are more bullish about the market’s prospects than women, 62 percent to 47 percent, as are those without college degrees as compared to those with degrees, 57 percent to 47 percent.

Post-election run-ups in the U.S. stock market following presidential elections aren’t unusual. The S&P 500 Index has climbed almost 4.8 percent since Trump’s surprise Nov. 8 win.

Trump’s supporters are much more likely to say that they expect their 2017 to be better financially than Clinton supporters, 55 percent to 25 percent.

Ebbing Anxiety

More than seven years after the end of the most punishing recession since the 1930s, an era of anxiety appears to be ebbing. By 25 percent to 10 percent, poll respondents say they expect their job security to improve rather than worsen, while the remainder either foresee no change or do not have a job. Employers boosted payrolls by 178,000 people in November, as the unemployment rate tumbled to a nine-year low.

Many more poll respondents were more optimistic than pessimistic about the value of their home improving in 2017, 35 percent to 8 percent. That’s up from a 20 percent to 20 percent split at the same time in 2012.

On retirement security, 35 percent say they will be better off next year and 13 percent worse, compared to 19 percent better and 21 percent worse four years ago. For overall financial security, 38 percent say better and 12 percent worse, compared to 25 percent better and 21 percent worse in 2012.

American Institutions

The survey also looked at American institutions, including small businesses, corporate executives, the Federal Bureau of Investigation, Wall Street banks, Congress, the White House, the Federal Reserve, insurance companies and the national news media.

The Federal Reserve is viewed favorably by 50 percent and unfavorably by 26 percent, while 24 percent are unsure. That’s up from 42 percent favorable when the poll last tested it as an institution in March 2010.

The survey shows Federal Reserve Chair Janet Yellen isn’t nearly as well-known as national politicians. She’s viewed positively by 24 percent and negatively by 19 percent, while 57 percent say they don’t have an opinion on her.

Small business is viewed favorably by 85 percent. Corporate executives and Wall Street banks don’t do nearly as well, with favorable numbers of just 30 percent and 26 percent, respectively.

Insurance companies and the national media have about the same proportion of Americans who view them favorably, 34 percent and 35 percent.

The FBI is viewed favorably by 58 percent. That includes 55 percent of Clinton supporters, even though some of her backers have expressed frustration with how the agency handled the timing of pre-election announcements about an investigation into her use of a private e-mail server when she was secretary of state.

Energy Policy

By a two-to-one margin, the poll shows American adults think it’s more important for the country’s energy policy to focus on renewable sources than on the coal and natural gas industries.

Majorities of Trump voters say fossil fuels are more important, while almost nine in 10 Clinton voters pick renewable policy as more pressing.

Almost half, 46 percent, see climate change as a major threat, unchanged from when the poll asked in June 2014. Three-quarters of Clinton voters view it as a major danger, while 21 percent of Trump supporters do.

Almost two-thirds -– 64 percent -– think the U.S. media has fallen off track and is no longer valuable in its traditional role of checking the powers of the three branches of federal government. Among Trump supporters, 82 percent hold that view, while 48 percent of Clinton backers do.

The poll of 999 American adults has a margin of error of plus or minus 3.1 percentage points, higher among subgroups. It was conducted Dec. 2-5 by Iowa-based Selzer & Co.

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