Democrats are coming around on the stock market

(Donald Trump and his daughter Ivanka.Thomson Reuters)

President Donald Trump may be the least popular president in modern history, but even his main detractors can't deny the stock market's strength under his administration.

About 57% of Democrats say they feel optimistic about the short-term outlook for stocks, a significant increase from 10% in October, according to a survey conducted by UBS. Their sentiment on the S&P 500 has climbed steadily since the presidential election, the data shows.

That groundswell of confidence has mirrored a similar improvement in the overall economic outlook across all political parties. About 61% of investors are optimistic about the US economic outlook, up from 42% last summer, according to the survey.

Further, while US investors are holding about 20% of their investable assets in cash, UBS found that more than half of them said they were willing to deploy that capital — so long as they saw more progress from Trump, especially on policies that would further boost economic growth.

They're specifically interested in lower personal income taxes and more infrastructure spending. About 40% of survey respondents said they needed to see steps toward those initiatives before they would put more cash to work in the market.

Business owners, however, are ready to deploy capital now, the survey found. About two-thirds of them said they planned to invest more in their business, while 56% said they would increase hiring. Each figure is more than double the proportion who said they expected to invest less or downsize their workforce, respectively.

Investor stock market confidence matches expectations from strategists across Wall Street, who see the S&P 500 climbing another 2% by year-end, according to a 19-person Bloomberg survey. Binky Chadha of Deutsche Bank, the most bullish with a target of 2,600, said he saw the index rising 7.7% from Monday's close.

UBS surveyed 2,272 affluent and high-net-worth investors, as well as 383 business owners with at least one other employee. The firm also conducted follow-up interviews with 90 respondents.

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