Sixty-five percent of equities and 58% of options traders believe the S&P 500 Index will rise between 5% and 20% in 2010, according to a survey of 240 investors by online broker TradeKing. Many said they are more confident about the stock market now that the Obama administration has shifted its focus from healthcare reform to job creation.
While 50% of respondents described themselves as taking a “neutral” position on the market for the next three months, those who described themselves as “bears” plunged from 36% a year ago to a mere 20%--the lowest reading since October 2007.
Twenty-eight percent said the Massachusetts Senate election results make them believe healthcare is not the priority is was, making them “more confident” about the markets. Only 6% said it made them “less confident” The remaining 66% either said it would have “no effect” or they were “unsure.”
Asked what is the most important economic factor they will look for this quarter, 45% of equity traders and 50% of options traders said unemployment.
“Last quarter, investors indicated they were eager to close the book on 2009 and looking to 2010 for significant economic recovery,” said Don Montanaro, chairman and CEO of TradeKing. Investors now “predict a lift in the market by year-end. We can see from the increased trading activity at TradeKing that there is less hesitation, but in the near-term, a great deal of uncertainty remains while major government initiatives around healthcare and finance reform, as well as job creation, continue to be defined.”