Salient to Investors:
In a Bloomberg global poll of investors:
- 75% expect a short-term agreement to avert the fiscal cliff, 6% expect to go over the cliff and into a recession. 40% expect financial markets to rise after a short-term tax-and-spending deal, 28% see no significant market reaction, 26% say markets would fall. 7% see no sweeping accord, 50% see a package that reduces the deficit over 10 years, 38% expect no significant cut in federal debt.
- 52% are optimistic about the impact of Obama on the investment climate, 51% said his re-election was good for the financial markets. 30% of US investors are optimistic about Obama, 68% pessimistic.
- 65% of non-US investors endorse Obama’s policies. 55% approve of Obama, 33% approve of Boehner. 26% of US investors approve of Obama, 73% disapprove. 54% approve of Boehner. 65% approve of Bernanke.
- 46% say the US economy is improving, versus 34% in September. 53 % of non-US investors say economic growth is getting better, versus 34% of US investors.
- 62% expect house prices to be higher in 6 months, 9 % expect a renewed decline.
- 88% say taxes are going up. 51% say returning top marginal tax rates to Clinton levels will help the economy, 35% say it will hurt growth. 35 percent of US investors say higher taxes will help, 60% of non-US investors agree.
- In response to the 3.8% tax on unearned income on Jan 1, 2013, 25% are taking profits, 13% are moving into tax-favored investments, 11% are selling dividend-paying shares, 9% are exercising stock options, and 38% are standing pat.
Philippe Giordan at KBL Monaco Private Bankers and the University of Paris Dauphine said tax increases won’t hurt as recovery will first come from real estate and mass consumption.
Kenichi Katsuhara at Aozora Bank said the problem is the fundamental difference in political philosophy. Uzi Zimmerman at Ventura Capital Mgmt said Obama’s policies have been and will be damaging to the US economy.
Nessan O’Carroll at Mizuho Corporate Bank doesn’t expect significant reallocation of investment outside the US or a significant hit to wealthy entrepreneur affected by the tax increases.