Worries About Market Losses Wane

Posted by: on April 8, 2010

The Optimism Meter hit 55 on April 6, up from 52 one week earlier. Only 15% of Americans believe that U.S. stocks will lose value over the next 12 months, while 32% say the rally will continue.

Each of the charts that follow measures one of the four different components of the Optimism Meter: economic growth, jobs, equity markets, and real estate. Like the Optimism Meter, the components appear on a scale of 0 to 100, with 100 representing the highest level of optimism.

ECONOMIC GROWTH: HERE TO STAY?

HIGHLIGHT: Bloomberg’s survey of 57 economists estimates that U.S. gross domestic product will expand by 3% a year in both 2010 and 2011. Thirty-seven percent of respondents think the economy is getting worse, and only 27% see improvement ahead.

JOBS: SIGNS OF IMPROVEMENT

HIGHLIGHT: Forty-eight percent of individuals say that if they lost their job, it would be very hard to find a new one that paid as much. That’s down from 44% one week earlier. Economists predict that unemployment will average 9% in 2011, down from an average 9.6% in 2010.

EQUITY MARKETS: A LOT LESS RISKY

HIGHLIGHT: The volatility of the Standard & Poor’s 500-stock index continued its year-to-date decline over the past week. Just 15% of individuals expect the stock market to fall over the next 12 months.

REAL ESTATE: NO PICK-UP YET

HIGHLIGHT: Fifty-six percent of YouGov survey respondents say they believe their homes won’t lose value over the next year. Twenty-five percent think real estate has yet to hit a bottom.