Investors are putting their money on President Barack Obama’s stewardship of the U.S. economy even as his job-approval rating has declined, according to a global quarterly poll of investors and analysts who are Bloomberg subscribers.

Almost 4 of 10 respondents picked the U.S. as the market presenting the best opportunities in the year ahead. That’s more than double the portion who said so last October, when the U.S. was rated the market posing the greatest downside risk by a plurality of respondents. 

Lawrence Summers, director of the White House National Economic Council, said this attests to Obama’s efforts at “restoring the United States to strong economic fundamentals.” He added that “while there remains much to do, the U.S. economy is growing.” 

“We’ve seen the bottom; we’re firm, and the United States is slowly moving forward,” said Wayne Smith, 51, managing director of fixed-income trading at Uniondale, New York-based Northeast Securities, which manages $3.5 billion. 

Following the U.S.’s 39 percent rating as the most promising market were Brazil, chosen by 29 percent; China, 28 percent; and India, 27 percent. Those are three of the four so- called BRICs, large emerging markets that also include Russia. Just 6 percent chose Russia. 

In a poll taken in January, China was the favorite followed by Brazil. Respondents were allowed to pick multiple countries. 

Forty-two percent of investors now believe the world economy is deteriorating, double the 21 percent who thought so in January. U.S. investors were the most pessimistic about the global economy, with 58 percent saying it is getting worse versus 31 percent of Europeans and 35 percent of Asians. Europeans were the most pessimistic about their own region, with 40 percent viewing it as deteriorating; 21 percent of U.S. investors viewed their home region negatively, while 9 percent in Asia felt that way. 

International views of the European Union have declined sharply. More than half of respondents believe the EU offers the worst investment opportunities, up from a third who said so in January, when Europe also ranked at the bottom. 

Debt Crisis 

“While American companies cut down the workforce at their plants as fast before as they are now hiring workers back, European companies were not able to respond in a similar way,” said poll respondent Ofir Navot, 35, of Tel Aviv, head of global investments for Ramco Mutual Funds, which manages about $400 million. 

Investors’ rising confidence in the U.S. economy isn’t reflected in their appraisal of Obama: The poll shows his job- approval rating dropped to 51 percent from 60 percent in January. 

Investors remain bullish on China’s long-term prospects. More than 6 of 10 believe China will replace the U.S. as the world’s largest economy within 20 years. Almost a quarter believe it will do so within a decade. 

Respondents don’t share Treasury Secretary Timothy Geithner’s optimism that China will revalue its currency soon. A majority said it will be at least a year before the country does so. 

Making Money

The quarterly Bloomberg Global Poll of investors, traders and analysts on six continents was conducted June 2-3 by Selzer & Co., a Des Moines, Iowa-based firm. It is based on interviews with a random sample of 1,001 Bloomberg subscribers, representing decision makers in markets, finance and economics. The poll has a margin of error of plus or minus 3.1 percentage points. 

Even with the pessimism over the global outlook, more investors see a chance to make money in this environment. Thirty-five percent said they are seeing opportunity and taking risks, up from 27 percent who said so in January. Asian investors were especially likely to see rewards ahead, with 48 percent saying they are taking more risks. 

With poll respondents confident in U.S. growth prospects, the emerging doubts about a global economic recovery haven’t translated into major shifts in views toward asset classes. As in the January poll, stocks are considered the most attractive asset class for the coming year. While commodities were second, the portion of investors choosing them declined to 23 percent from 31 percent. 

Bearish on Bonds 

Bonds were chosen as the asset class likely to offer the worst returns, with 36 percent of respondents saying that. Real estate was rated next worst, chosen by 24 percent. 

Investors in Asia, where there are fears that China’s property market is overheated, were the most pessimistic about real estate, rating it the worst asset to hold. 

Poll respondents by an almost 2-to-1 margin expect to increase rather than decrease holdings of stocks during the next six months. 

More than half of investors believe the S&P 500 index will be higher in six months, though sentiments are bearish on the Euro Stoxx 50 index and Britain’s FTSE index. 

Investors are also bullish on crude oil prices, which usually rise along with economic activity. Forty-nine percent believe oil prices will be higher in six months compared with 24 percent who say they will be lower. The rest expect little change. 

Gold Seen Rising 

By a margin of 47 percent to 30 percent, respondents say they expect the price of gold, a traditional hedge against political and economic turmoil, to rise in six months. By a margin of 50 percent to 25 percent, they see yields on the 10- year Treasury note rising. 

Fears of inflation are muted. Only a little more than a quarter consider it a major threat in “the next couple years.” The regions considered most at risk were China, cited by 19 percent of respondents, followed by the U.S., cited by 17 percent, and the Euro zone, picked by 10 percent. 

To see the methodology and exact wording of the poll questions, click on the attachment tab at the top of the story. 

Bloombergs - VT