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.
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
“We’ve seen the bottom; we’re firm, and the United States
is slowly moving forward,” said Wayne Smith,
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.
“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
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
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
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
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
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
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.
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