Advisors steady on today, darker on the next six months

Advisor confidence in the economy and stock market barely budged in July. The WMIQ Advisor Sentiment Index from WealthManagement.com puts the current-condition reading for the economy at 118, down three points from June. The market reading is 105, down a point. Both remain above 100, the neutral mark. The six-month outlook has now worsened for a third straight month.

Forty percent of advisors now expect the economy to decline over the next six months. Just 26% expect improvement, down 12 points from June. As recently as May, that optimistic camp stood at 55%. The stock market has the same shape: 29% expect gains over the next six months, off from 45% in June.

The one-year outlook is nearly a coin flip. On the economy, 42% expect a decline. Roughly the same share, 43%, expects improvement. Another 14% see no change. On markets, 41% have a positive view. The share expecting declines is 36%.

The monthly survey, produced with Wealth Management and Informa Engage, collected responses July 1-30 from retail-facing advisors. The index weights those responses to a neutral 100.

The headline readings still point up, but the forward numbers should drive the portfolio conversation. The gap between how advisors describe the present and what they expect two quarters out keeps widening. That kind of divergence tends to surface in portfolios before it shows up in economic data — in cash buffers, in trimmed risk, in the quiet shift from 'the setup is good' to 'we're ready for the turn.' If a client portfolio still looks like May, the July survey says the conversation is already late.