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American Morning

Gallup Poll: Are American Investors Optimistic About Economy?

Aired June 26, 2001 - 11:14   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Consumer confidence is up for the second month in a row. And the Fed is considering another cut in interest rates.

With that in mind, our Gallup Poll Editor-in-Chief Frank Newport joins us live from Princeton, New Jersey -- a look at how Americans are thinking about the economy.

Good morning again.

FRANK NEWPORT, EDITOR-IN-CHIEF, GALLUP POLL: Indeed. Good morning, Kyra.

What we have here is the PaineWebber/Gallup Index of Investor Optimism. And that is quite important. This is a look at about 40 percent of Americans who have $10,000 or more that they invest in the market. So we have culled out a lot of people who really aren't really in the market and looked just at investors -- and we would say down slightly in our latest reading on the PaineWebber/Gallup index for June.

We indexed it at 100 way back in 1996 when it started. And it's, of course -- in the bull market, had been up -- down a little, back up. But our most recent reading is 104 here -- not all that much above where it started in '96, on an index basis.

Let's telescope in just on the year 2001 to show you the month- by-month progression of the index: February, 126; March, 137. But it's been down since then. And a little unlike the general consumer confidence you just mentioned from last month to this month, it is down slightly, as I see here, to 104. Probably perceptions of what the government is doing have caused that to fall lower than the other components that go into that index.

Another thing which may be affecting it is energy. Investors say -- 57 percent -- that the energy situation is having a major impact on the economy. And when we look at it internally, these people who are worried about energy also are the least optimistic about the economy. So we think there is some causal connection there.

Finally, one last point: Ever the optimists, these investors still say, a year from now, probably the market will be higher -- not so much last October. When the market was high, they were less optimistic. But if you look over on the right-hand side there, you've got over half of American investors on the right still saying -- hope springs eternal -- that the stock market will be higher a year from now compared to where it is right now.

Kyra, Daryn, that's a look at American investors -- back to you.

KAGAN: All right.

KYRA PHILLIPS, CNN ANCHOR: Thanks, Frank.

KAGAN: Thank you so much.

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