Salient to Investors:

Bloomberg Global Poll:

  • International investors are the most bullish on the US and Japanese markets in more than 3.5 years as both economies are seen to be improving.
  • Over 40% will reduce gold exposure over the next 6 months, close to 3 times more than those who plan to increase it.
  • 54% said equities will offer the highest returns over the next year – the best reading in the nearly 4-yr history of the poll
  • 20% said real estate will offer the highest returns over the next year. 42% plan to increase their exposure to the property market in the next 6 months, versus 36 percent in January.
  • Over 60% said the US economy was improving, the most since September 2010.
  • 40% plan to increase their exposure to the US dollar over the next 6 months versus 20% in January, while only 9 percent said they were reducing exposure.
  • Over 50% expect the S&P 500 to rise over the next 6 months versus 62 percent in January.
  • Over 60% expect the Nikkei 225 to rise over the next 6 months, 16 percent expect it to fall.
  • Close to 50% say the Japanese economy is improving versus 14 percent who said it is deteriorating.
  • Over 25% expect China markets to offer the second worst opportunity after the EU over the next year. 45% would avoid China. 30%  believe slowing Chinese growth as the biggest risk to the global economy in 2013, second to 36 percent who see Europe as the largest danger.
  • 60% expect a debt default by Cyprus, 35% expect a debt default by Slovenia.
  • Only 6% see a high risk that Syrian civil war would escalate and affect oil prices. 67%  said US intervention would damage regional stability.
  • 20% said commodities were the asset to be most shunned over the next year.
  • 56% believe deflation will be a greater threat to the global economy than inflation over the next year, versus 75% who thought inflation was the bigger danger in January 2011.

Charles Doraine at Doraine Wealth Mgmt is upbeat on the US as housing is coming back and the US can be energy independent in the not too distant future.

Peter Fitzgerald at Aviva Investors says the US equity market rally will continue because the US growth is reasonable, monetary policy is extremely accommodative, housing continues to recover, businesses have cash and have underinvested for years. Fitzgerald said inflation simply has not been a problem, while deflation poses a much greater risk with current debt levels.

Ryan Longhenry at CJS Trading said the US dollar should benefit in the months ahead as the Fed looks to scale back its stimulus while other central banks add to theirs.

Sangwook Lee at Shinhan Bank said the US economy will grow at least 2.5 percent in 2014 while as long as the BOJ keeps QE until 2015, major Japanese corporates and banks’ equities will outperform other markets.

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