By Cyril Tuohy
With a robust finish to equity markets and solid gains in real estate prices, investors and chief financial officers are optimistic about the economy’s near-term prospects as it moves into the second half of the year, according to a pair of economic sentiment surveys.
The John Hancock Investor Sentiment Index rose two points to 26 in the second quarter, surpassing the all-time high of 24 achieved in the first quarter, the company said.
“Amid steady gains in the U.S. equity markets, investors are continuing to gain confidence in longer-term investing in companies and in less liquid investments such as real estate,” Bill Cheney, chief economist for John Hancock, said in a news release.
More than half of investors surveyed (53 percent), said their current financial position is better today than it was two years ago, up 11 percentage points from last year’s survey. Nearly half (49 percent) of investors surveyed, believe that two years from now they will be in even better financial shape, the survey found.
The survey also found that 81 percent of investors believe that now is a good time to contribute to their 401(k) plans, and 78 percent said it was a good time to contribute to Individual Retirement Accounts, the survey found.
In a separate survey of chief financial officers, senior executives’ sentiment reached its highest level in 15 months, according to Deloitte’s Q2 CFO Signals survey.
Net optimism, or the percentage of CFOs expressing rising optimism minus those not expressing optimism, rose in the second quarter. Additionally, this period is the first time optimism has carried over into the second quarter since 2010 when CFO Signals was launched, Deloitte said.
“There is a definite shift in CFOs’ sentiment this quarter despite some of their growth expectations remaining below the long-term averages,” Sanford Cockrell III, national managing partner of Deloitte’s CFO program, said in a statement.
A total of 62 percent of CFOs said paying down debt, buying back company stock or paying dividends would be the top uses of their companies’ cash.
Greg Dickinson, director of the North American CFO Signals survey, said in a statement that survey patterns revealed companies “are beginning to believe conditions are substantially improving, while others are not yet convinced.”
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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