Consumer Zest for U.S. Stocks Lowest Since Trump Election Win

(Bloomberg) -- As market volatility reawakens, mom-and-pop investors just don’t have the stomach for a trade war.

March’s Conference Board survey of U.S. consumer sentiment shows retail investors’ enthusiasm for the stock market has dimmed to its lowest levels since the surprise victory of Donald Trump in November 2016.

Only a net 6 percent of those surveyed think equities will be higher in one year; the share was above 30 as recently as January. That was before the S&P 500 tumbled into its first correction in two years and last week’s harrowing selloff that wiped nearly $1 trillion from the of American equities.

“Consumers aren’t nearly as ebullient on stocks as people assume they are,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research. “If stock market tops are borne out of excessive greed, especially at the consumer level, these numbers would suggest that’s not the case right now.”

To the extent that this metric is a contrarian indicator -- as it was in November 2016 -- this implies that investors can expect fairly normal returns from U.S. stocks going forward, he added.

The survey was conducted prior to the Trump administration’s formal announcement of tariffs against China but after the proposed imposition of levies on inbound steel.

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