E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results indicate a significant rise in positive investor sentiment quarter over quarter and year over year:

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  • The majority remain bullish at 68 percent, increasing five percentage points from Q4'17, and three percentage points from Q1'17.
  • Nearly eight out of ten investors believe the market will rise this quarter, up 11 percentage points from Q4'17, and 17 percentage points from Q1'17.
  • Two out of three investors believe the US economy is healthy enough for at least one rate hike in the first quarter, up seven percentage points from the previous quarter, and three percentage points from Q1'17.

"Investor optimism in this market has reached new heights following a year of serious growth," commented Mike Loewengart, VP of Investment Strategy at E*TRADE Financial. "While there are more than a few uncertainties to keep investors awake at night, they are clearly reacting to the roundly positive economic data that has been coming in at a steady stream, not to mention the boost that tax reform may bring. And as we approach our first earnings season of the year, investors are eying a variety of opportunities across the market."

The survey also explored retail investors' thoughts regarding potential investing opportunities for the first quarter:
  • Energy. Nearly half of investors believe the energy sector offers potential in Q1, up three percentage points from the previous quarter. Interest in the energy sector remains strong as the current administration has opened up offshore drilling and stronger crude oil prices helped push the sector to recent highs.
  • Financials. Investors' interest in financials rose four percentage points from the previous quarter. With additional Fed rate hikes expected in 2018, investors may view financials as a sector that could potentially benefit. Additionally, many investors may view the sector favorably due to the potential benefits of a new lower corporate tax rate.
  • International. Appetite among investors for foreign assets increased eight percentage points from the previous quarter. In 2017, international equities significantly outpaced domestic equities, breaking a trend that had been in place since the market bottom of the financial crisis nearly a decade ago.

E*TRADE aims to enhance the financial independence of traders and investors through a powerful digital offering and professional guidance. To learn more about E*TRADE's trading and investing platforms and tools, visit etrade.com.

For useful trading and investing insights from E*TRADE, follow the company on Twitter, @ETRADE.

About the Survey

This wave of the survey was conducted from January 1 to January 15 of 2018 among an online US sample of 923 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.23 percent at the 95 percent confidence level. It was fielded and administered by Research Now. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 61 percent male and 39 percent female with an even distribution across online brokerages, geographic regions, and age bands.

Referenced Data

When it comes to the current market are you?
Q1'18 Q4'17 Q3'17 Q2'17 Q1'17
Bullish 68% 63% 60% 63% 65%
Bearish 32% 37% 40% 37% 35%

How do you predict the market will end this quarter?
Q1'18 Q4'17 Q3'17 Q2'17 Q1'17

77% 66% 61% 55% 60%
Rise 20% 2% 2% 1% 0% 1%
Rise 15% 7% 6% 3% 4% 3%
Rise 10% 18% 16% 14% 13% 13%
Rise 5% 50% 42% 43% 38% 43%
Stay basically where it is 14% 17% 21% 23% 18%
Drop 5% 7% 11% 13% 16% 17%
Drop 10% 2% 4% 4% 4% 4%
Drop 15% 0% 2% 0% 2% 1%
Drop 20% 0% 0% 1% 0% 0%
Drop 9% 17% 18% 22% 22%

Is the US economy healthy enough for the Fed to enact additional rate hikes this quarter?
Q1'18 Q4'17 Q3'17 Q2'17 Q1'17
Agree (Top 2 Box) 66% 59% 58% 62% 63%
Strongly agree 20% 17% 14% 16% 15%
Somewhat agree 46% 42% 44% 46% 48%
Neither agree nor disagree 25% 27% 24% 26% 23%
Somewhat disagree 7% 12% 15% 10% 12%
Strongly disagree 2% 2% 3% 2% 2%
Disagree (Bottom 2 Box) 9% 14% 18% 12% 14%

The health of the markets outside the US appeals to me as an investor this quarter.
Q1'18 Q4'17 Q3'17 Q2'17 Q1'17
Agree (Top 2 Box) 62% 54% 53% 50% 43%
Strongly agree 20% 14% 14% 12% 10%
Somewhat agree 42% 40% 39% 38% 33%
Neither agree nor disagree 24% 29% 29% 29% 28%
Somewhat disagree 11% 13% 14% 16% 24%
Strongly disagree 3% 4% 4% 5% 5%
Disagree (Bottom 2 Box) 14% 17% 18% 21% 29%

What industries do you think offer the most potential this quarter? (Top three)
Q1'18 Q4'17 Q3'17 Q2'17 Q1'17
Energy 47% 44% 46% 45% 53%
Information technology 45% 46% 45% 46% 34%
Financials 43% 39% 43% 39% 46%
Health care 41% 43% 41% 39% 42%
Industrials 29% 22% 24% 28% 29%
Telecommunication services 23% 27% 24% 24% 19%
Materials 21% 20% 20% 20% 20%
Utilities 19% 22% 24% 23% 22%
Consumer staples 17% 20% 20% 20% 18%
Consumer discretionary 15% 16% 16% 15% 16%

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About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.

E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation. ETFC-G

© 2018 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and Research Now are separate companies that are not affiliated. E*TRADE Financial Corporation engages Research Now to program, field, and tabulate the study. Research Now Group, Inc. provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to www.researchnow.com.

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