Salient to Investors:
A Bloomberg poll of investors, analysts and traders showed:
- 40% see the euro-area economy as improving, more than 4 times the number in May
- 40% see the world economy as strengthening, the most since January 2011.
- 52% expect stocks to produce the best return over the next year versus 16% for real estate, 4% for bonds. 48% expect bonds to perform the worst.
- 19% are bearish on gold, with 44% expecting it to fall in 6 months.
- 26% see political gridlock over fiscal policy as the greatest risk to the global economy, followed by a weakening Chinese economy. 17% see Europe as the greatest risk to the global economy, versus 33% 4 months ago.
- 34% said the EU offers one of the best investment opportunities, up from 18% in May, while 18% said the EU offers the worst prospects, down from 45% in May.
- 53% said the Euro Stoxx 50 Index will be higher in 6 months.
- 75% said Spain and Italy will avoid bankruptcy.
- Almost 33% said Greece will avoid bankruptcy, with 54% saying its position in the euro area will be weaker after Germany’s elections this month.
- 12% plan to buy euros and 9% intend to buy more euro-area government debt.
- 64% said the US economy is improving.
- Just over 50% said Europe’s markets are a best bet for the coming year, and 58% expect the S&P 500 to rise into early 2014.
- 59% said Japan’s economy is improving. 58% expect the Nikkei 225 Stock Average to sustain its rise this year, but only 26% see Japan as a top investment opportunity in the next 12 months.
- 52% plan to increase their exposure to equities over the next 6 months versus 63% in January, a third are looking to real estate, and 37% like the U.S. dollar. Over 50% are reducing their investments in US Treasury bonds and 38% are fleeing corporate bonds.
- 15% plan to increase their gold reserves versus 30% a year ago. 25% are reducing their exposure to commodities.
- 27% are buying emerging-market equities, 27% are selling them. 6% plan to increase their yen exposure, and 3% like Japanese government bonds.
- 41% are optimistic on Obama’s policies toward the investment climate, while 50% regard him favorably, both the lowest levels in a year.
- 65% like Angela Merkel’s policies. 50% like David Cameron’s policies. 70% like Abe’s policies. 47% like Xi Jinping’s policies. 13% like Francois Hollande’s policies.
Peter Kinsella at Commerzbank said the structural issues facing the euro and monetary union are being addressed, and the acid test is whether they will lead to job growth.
Andreas Domke at Allianz Global Investors Europe said a surprising broad recovery seems to be under way.
Marie Owens Thomsen Credit Agricole Private Banking said global risk is the lowest in the post-crisis period as investors see little risk of a systemic threat, so there is ample scope for risky assets to climb.
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