A study of 1,200 independent investment advisors surveyed by Charles Schwab has found a strong majority of those responding are optimistic about the prospects for improvement in the economy with 72 percent predicting the S&P 500 Index will continue to rise over the next six months and 79 percent approving of the leadership of Federal Reserve Chairman Ben Bernanke. Most expect the housing market will improve, a significant turnaround from January, although they also believe job losses will continue. Schwab, which conducted the study between July 28 and August 7, also found that 72 percent expect the end of the recession in less than 12 months while 36 percent think that will occur by the end of the year. The latter group is in line with Bernanke's prediction that the downturn will be over before 2010.
There was less optimism about local markets with 39 percent reporting that their economy has continued to declined. Fifty-nine percent said their area's performance has improved or remained static during the last six months. Advisors in the Northeast expressed the most confidence with 32 percent stating their economy has improved, as opposed to the gloomiest view in the West with only 18 percent of the region's advisors holding that opinion.Only 35 percent of advisors expect the housing market to continue to soften, which contrasts with 80 percent in July 2007 and 69 percent in January. Twenty-six percent believe the Fed will increase interest raises during the next six months, up from 10 percent in January and 46 percent predict inflation will rise during the same period. Those who think unemployment will rise in this period fell to 81 percent, down from 92 percent in January. But 43 percent believe consumer spending will rise, up from 14 percent from the same period.