Moomoo Canada survey shows strong tech sector preference as investors eye US stocks and rate cuts
A survey by Moomoo Financial Canada Inc. (Moomoo Canada) shows that Canadian retail investors continue to prefer the technology sector.
This preference persists amid growing expectations of interest rate cuts by the Federal Reserve and the Bank of Canada in September.
The survey also reveals that utilities and materials, both considered defensive sectors, are the next most favoured by investors.
The survey shows a split in investor opinion on whether the US and Canadian economies can avoid a recession over the next six months. According to the findings, 53 percent of respondents believe the US economy will avoid a downturn, while only 49 percent think Canada can do the same.
Additionally, 47 percent of participants expect a recession in the US, and 51 percent foresee one in Canada. When it comes to stock market sentiment for the remainder of 2024, 35 percent of investors are bullish, while 47 percent maintain a neutral stance.
The data also indicates that 71 percent of those surveyed are buying more US stocks than Canadian ones, reflecting a strong preference for the US market.
Meanwhile, 63 percent express some confidence in meeting their investment goals, with retirement being the primary objective for 40 percent, followed by general savings.
Justin Zacks, vice president of Strategy at Moomoo Technologies Inc., commented on the survey’s timing, noting that “at the time the survey closed on August 21, the S&P/TSX Composite Index had risen over 10 percent since the start of the year, while the S&P 500 Index was up more than 17 percent, led by the technology sector.”
He added that the ongoing investor preference for the technology sector likely reflects confidence in the growth potential of artificial intelligence.
Zacks also pointed out that the dominance of US-based and listed technology companies makes it unsurprising that Canadian investors are increasingly buying US stocks.
The preference for utilities and materials suggests a cautious investment approach, aligning with the divided outlook on economic conditions and the neutral sentiment many hold toward the stock markets for the rest of the year.
Despite some uncertainty, 63 percent of investors remain somewhat confident in achieving their goals, particularly in retirement savings.
The survey also underscores the influence of institutional investors on retail investors' decisions, with 46 percent of respondents indicating that they look to institutional moves as a guide for their own investment choices.
