Investor optimism continued in a relative holding pattern in each of the four geographic regions of the United States during the third quarter of 2004. According to quarterly aggregates from the UBS/Gallup Index of Investor Optimism*, investor sentiment in each region of the country changed little from its second-quarter 2004 levels, after rising briefly in the first quarter of the year. Optimism inched up modestly in the Midwest in the third quarter and dipped a bit out West, but was nearly flat in the southern and eastern regions.
Midwestern Region
Investors in the Midwest showed a modest uptick in overall optimism in the third quarter. The overall Index rose eight points in that region, from 69 in the second quarter to 77 in the third quarter -- still slightly below its first quarter level of 81.
In the Midwest, the Index's Personal Dimension, which tracks investors' optimism about their own personal investment situations, inched up four points to 58 in the third quarter. The Economic Dimension of the Index, which measures optimism about the country's overall economic situation, rose five points, from 14 to 19.
Western Region
In the West, the overall Index fell seven points in the third quarter, from 82 to 75. Among investors in the West, the overall Index is now at its lowest level since the third quarter of 2003, when it was 70.
Western investors' outlooks regarding their personal investment situations have remained unchanged since last quarter. The Personal Dimension in the West remained flat at 63 between the second and third quarters of 2004. However, the Economic Dimension declined from 19 to 12.
Southern Region
The overall Index of Investor Optimism score dipped almost imperceptibly in the South, from 103 to 101. It remained below its first quarter mark of 119.
The Personal Dimension in the South picked up a single point in the third quarter, reaching 74, and the score on the Economic Dimension dipped two points to 27.
Eastern Region
In the East, overall investor optimism also gained one point in the third quarter, moving from 51 to 52. Optimism in this region is still far short of its first quarter level of 77.
The Personal Dimension in the East dipped a point to 45 in the third, and the Economic Dimension inched up from 5 to 7.
Bottom Line
So far, predictions that the market would have a good year in 2004 because of the presidential election are failing to materialize. With gas prices hitting new highs in late September and early October, stock market gains are looking even more far-fetched.
In every region of the country, the investment outlook is still more positive than negative. There hasn't been any gain in momentum to suggest that a rally is imminent, but three months can be an eternity for the market in terms of how much change can occur.
*Results are based on telephone interviews with more than 800 investors nationwide, aged 18 and older, conducted monthly since January 2000. For quarterly results based on these total samples, one can say with 95% confidence that the margin of sampling error is ±2 percentage points. Each region consisted of at least 358 interviews per quarter. For quarterly regional results based on these total samples, one can say with 95% confidence that the margin of sampling error is ±5 percentage points.
Gallup identifies these states as "East": Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware
Gallup identifies these states as "Midwest": Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas
Gallup identifies these states as "South": Virginia, North Carolina, South Carolina, Georgia, Florida, Kentucky, Tennessee, Alabama, Mississippi, Arkansas, Maryland, Louisiana, Oklahoma, and Texas, West Virginia, and the District of Columbia
Gallup identifies these states as "West": Montana, Arizona, Colorado, Idaho, Wyoming, Utah, Nevada, New Mexico, California, Oregon, and Washington
