A new survey released today by the American Association of Individual Investors shows less than 18% of everyday American investors are interested in investing on the stock market. That represents the basement level of support for stocks since April 2005 and drastically lower from l2014 when 58% of individual investors said they were optimistic about the stock market.
Why?
- The forthcoming U.S. Presidential election in November is making investors nervous.
- The global economy is barely growing.
- Rising political risks at home and abroad with Britain set to vote on whether to leave the E.U.
- The Federal Reserve is talking about lifting interest rates.
The recent upward momentum in the markets has many Fed-observers believing that the Federal Open Market Committee (FOMC) is seriously considering raising interest rates in June and that the economy is ready for another quarter basis point increase. James Bullard, President of the St. Louis Federal Reserve Bank said today that the tight U.S. labor market could lead to a rate hike next month.
The question remains however: Can stocks thrive if there is a rate hike in June and or July? One analyst says the U.S. stock market could experience a 20% correction if the Fed decides to raise rates. See more from CNBC’s “Trading Nation” below.
Here are the final numbers from Thursday, May 25th on Wall Street:
Dow Jones Industrial Average: 17,828.29 (-23.22 / -0.13%)
NASDAQ: 4,901.77 (+6.99/ +0.14%)
S&P 500: 2,090.10 (-0.44/ -0.02%)