Even as U.S. corporations continue to announce layoffs, investors are beginning to regain faith in the stock markets, according to a poll of 500 investors by MoneyShow.com. Fifty-one percent are bullish on economic conditions, up from 43% in August. In kind, 29% characterize themselves as bearish, down from a steady 39% from July through September.
Forty-five percent expect the financial crisis to improve in 2009 and 25% expect it will stay the same, whereas only 30% think it will get worse.
The optimistic outlook is rather curious, given that 30% expect negative GDP growth in the months ahead, compared with 7% that expected negative GDP growth a year ago.
The asset class investors are the most optimistic about is commodities, with 28% saying it will outpace other investment sectors, followed by 26% citing large-cap stocks and 20% small-cap stocks.
The sector that shows the biggest decrease in confidence is foreign stocks, with only 6% citing this as a good investment, down by 24% a year ago.
Inflationary concerns are still high, with 55% expecting an increase and 28% expecting it to remain the same. Investors are tossed up when it comes to interest rates; 27% expect the Federal Reserve will raise interest rates, but 30% expect the Fed will lower them.
As far as housing prices are concerned, 53% think they will stop falling, 41% think they could fall more, but only 5% think they will appreciate.
On the topic of taxes on dividends and capital gains, as well as income taxes on top earners, 59% believe the new administration will raise them, and only 5% think they will be cut.