Investor Sentiment In February Bounces Off Record Lows

Overall sentiment jumped 3.6 percentage points (ppt) last month, however remained in negative territory at -4.8%. This is the first rise in sentiment since last November.

In January, UK and US equities dropped to their lowest sentiment reading since Lloyds launched the index in 2013.

However, the two asset classes managed to overcome their January blues, with US shares jumping 11ppt to -9%, the biggest increase across all assets, and UK shares rebounding 7.6ppt to -21.6%. Year-on-year sentiment towards UK equities has fallen 36.4ppt.

Eurozone equities saw the biggest drop in sentiment last month, falling 0.5ppt to -28.2%, the second consecutive decline.

Meanwhile, despite UK property rising 5ppt to -12%, the index found investors are less optimistic about the future of London property, which dropped 3ppt, taking it 21ppt lower than the national average.

Sell signals: Five fund buyers reveal their key recession indicators

Markus Stadlmann, CIO at Lloyds Bank Private Banking, said the outlook is currently "not totally clear cut".

He commented: "For example, the latest Bank of America Merrill Lynch survey suggests more than half of respondents are expecting a deterioration in corporate profitability over the course of the year.

"In a similar vein, investment bank analysts have reduced their expectations for the corporate earnings in 2019, reflecting mood-driven concerns about a downturn in the economic cycle.

"However, Lloyds Bank Private Banking's leading indicators paint a much brighter picture," he continued. "Global economic growth in 2019 could be solid at 3.5% and we believe corporate profits could rise about 10% in major economies."