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> From: Michael Andrews <mandrews@ips.edu>
> Date: September 21, 2010 8:33:27 AM EDT
> To: Thad Brown <thad@ips.edu>, Ronnie Mainieri <ronnie@ips.edu>,
> Curt Hastings <curt@ips.edu>, Kitty Holland <kitty@ips.edu>, Jan
> Rehacek <honza@ips.edu>, Greg Shaw <greg@ips.edu>, Erica Frantz <efrantz@ips.edu
> >, Christina Maimone <christina@ips.edu>, Steve Huey <shuey@ips.edu>
> Subject: U.S. Loses No. 1 to Brazil-China-India Market in Investor
> Poll
>
> U.S. Loses No. 1 to Brazil-China-India Market in Investor Poll
> Share Business ExchangeTwitterFacebook| Email | Print | A A A
> By Mike Dorning
>
>
> Sept. 21 (Bloomberg) -- The U.S. has fallen behind emerging markets
> in Brazil, China and India as the preferred place to invest, a
> Bloomberg survey shows, though the world’s largest economy still
> ranks highest of all major developed countries.
>
> The U.S. ranked first three months ago in the last quarterly
> Bloomberg Global Poll. Along with the slipping perceptions of the
> U.S. markets in the most recent survey, conducted Sept. 16-17, poll
> respondents say the Federal Reserve is likely to take further steps
> to try to bolster the economy.
>
> In the September poll of 1,408 investors, analysts and traders who
> are Bloomberg subscribers, respondents rate the U.S. fourth for
> potential returns over the next year, behind Brazil and China, tied
> for first, and India, in third place.
>
> The U.S. economic situation “is obviously unsustainable, and the
> concerted attempt to suspend disbelief is playing increasingly
> poorly abroad,” says poll respondent Eric Kraus, chief strategist
> for Otkritie Brokerage House in Moscow. “One can delay, but no one
> can forestall the unwind of a multidecade credit bubble.”
>
> Economic reports released since the June poll show U.S. GDP growth
> slowed to 1.6 percent in the second quarter from 3.7 percent in the
> first quarter. In the final quarter of last year, GDP grew at a 5.0
> percent annual rate.
>
> Expectations for U.S. GDP growth next year have dropped to a median
> forecast of 2.5 percent in September from 2.9 percent in June,
> according to Bloomberg’s monthly survey of economists.
>
> S&P Rise
>
> Since the June survey, U.S. stock markets have been on the rise. The
> Standard & Poor’s 500 Index has risen 3.62 percent since the last
> investor poll was completed June 3. That’s not as much as Brazil’s
> Bovespa Index, which is up 10.56 percent and India’s Bombay Stock
> Exchange Sensitive Index, which is up 10.44 percent. The U.S. stocks
> still did better than China’s Shanghai Stock Exchange Composite
> Index, which has risen 1.41 percent since June 3.
>
> “I think the U.S. will get back on track, but not in the next 6-12
> months,” says poll respondent Thomas Knudsen, a senior trader with
> OW Supply & Trading in Copenhagen.
>
> Two-thirds of investors say they believe Federal Reserve policy
> makers, who meet today, will ease monetary policy through bond
> purchases by the end of the year. A similar 65 percent majority say
> the Fed bond purchases won’t boost U.S. economic growth.
>
> Overall, investors give the central bank favorable marks, with a 57
> percent majority believing its monetary policy is “about right.”
> More say it has been too aggressive, the view of 26 percent, than
> say it has been too timid, a view held by 14 percent.
>
> Popular Bernanke
>
> Fed Chairman Ben S. Bernanke is viewed favorably by 71 percent of
> respondents, up from 67 percent in June. He ranks highest in a list
> of eight global leaders and policy makers that includes President
> Barack Obama, Chancellor Angela Merkelof Germany and European
> Central Bank President Jean-Claude Trichet.
>
> Only 1 out of 6 investors believes the U.S. economy is currently
> improving, though a 45 percent plurality considers the U.S.
> “stable.” Another 37 percent believe the U.S. is deteriorating.
>
> The poll also shows that confidence in the dollar has slipped since
> June, when 63 percent of investors believed the U.S. currency would
> rise against the euro during the following three months. Forecasts
> are now evenly divided: 34 percent now expect a stronger dollar in
> three months; 32 percent expect little change; and 30 percent a
> weaker dollar.
>
> The Bloomberg Global Poll was conducted by Selzer & Co., of Des
> Moines, Iowa, and has a margin of error of plus or minus 2.6
> percentage points.
>
> No ‘Lost Decade’
>
> Investors are confident the U.S. will avoid some of the worst
> outcomes. Seven out of 10 investors say they believe there is little
> or no risk of a U.S. double-dip recession. Six out of 10 investors
> see little or no risk the U.S. will endure a Japan- like “Lost
> Decade” of minimal or no growth.
>
> “There is a black cloud overhead, but the worst is not yet to come,”
> says J. Ann Selzer, president of Selzer & Co.
>
> Still, investors are wary of the record U.S. budget deficits. A 53
> percent majority sees a big or moderate risk the budget deficit will
> provoke a crisis of confidence within two years that will spur “a
> dramatic rise” in long-term interest rates.
>
> Poll respondent Dieter Buchholz, head of equities at Falcon Private
> Bank in Zurich, said market sentiment could turn against U.S. debt
> if the bipartisan debt commission appointed by Obama fails to spur a
> credible reduction in long-term deficits or Congress bucks the White
> House to expand the deficit by extendingBush-era tax cuts for the
> wealthy.
>
> ‘Confidence Crisis’
>
> “When the non-Americans see that efforts by the administration to
> balance the budget are fruitless, then I think you will get a
> confidence crisis,” Buchholz said.
>
> In July, the White House budget office forecast the federal deficit
> would be a record $1.47 trillion for 2010 and $1.42 trillion for the
> 2011 fiscal year, which begins Oct. 1.
>
> Poll respondents were evenly split on whether the current U.S.
> Treasury bond market is a bubble. In six months, 49 percent expect
> yields on the 10-year Treasury note to be higher versus 26 percent
> who expect yields to be lower.
>
> Their view of the U.S. stock market is bullish: 49 percent expect
> the S&P 500 to be higher in six months, while 28 percent say it will
> be lower.
>
> Poll respondents in the U.S. are more optimistic about their nation
> as a place for investment; 35 percent of U.S. investors name it as a
> top market, just behind Brazil. Outside the U.S., that number drops
> to 17 percent.
>
> To contact the reporter on this story: Mike Dorning in Washington
> D.C. atmdorning@bloomberg.net.
>
> Last Updated: September 21, 2010 00:01 EDT