Two-thirds of U.S. respondents(67.6%) say investing would be improved if Republicans won control of Congress in the November elections, according to the quarterly poll of investors and analysts who are Bloomberg subscribers conducted Sept. 16- 17. Among U.S. respondents, 50 percent say a Republican takeover would improve the economy, 36 percent say it wouldn’t make much difference and 13 percent say it would be harmful.
The president does better with investors outside the U.S., with 53 percent saying he offers about the right balance on business issues. Those outside the U.S. are also less pessimistic about the investment climate his policies have created. Globally, 50 percent of poll participants say they consider him anti-business, up from 42 percent in a January Bloomberg Global Poll. Among U.S. respondents that number is 77 percent, unchanged from January.
Obama’s wider popularity outside the U.S. isn’t surprising, considering that stock indexes in Europe and Asia have done worse this year than those in the U.S., once adjusted for currency valuations.
Overall, 49 percent of poll respondents say the S&P is likely to be higher six months from now; only 38 percent say the same of the Euro Stoxx 50 Index and 37 percent of the FTSE 100 Index.
Most U.S. respondents - 70 percent - say they are not taking any action in anticipation of a potential increase in U.S. capital-gains taxes, which will happen if Congress doesn’t take action by the end of the year. Only about one in four respondents (27%) say they already have sold or plan to sell more assets than they normally would to lock in the current 15 percent tax rate. Those with a higher net worth are more likely to say they have already acted or are planning to, with 35 percent of those with a net worth of more than $1 million saying so, compared with 19 percent with smaller portfolios.
Unless Congress acts, rates for capital gains will increase to 20 percent from 15 percent. Dividends, currently taxed at 15 percent, would be taxed as ordinary income with rates as high as 39.6 percent. Under Obama’s plan, the capital gains rate would remain at 15 percent for most, while the top rate would rise to 20 percent.
Two-thirds of respondents in the U.S. (65%) say they think damage would be done to the economy if Congress approved Obama’s proposal to extend tax-rate reductions enacted under President George W. Bush only for those who earn less than $200,000 per individual, or $250,000 per couple.
There is division globally on what would be the best tax action for the U.S. economy. Within the U.S., 67 percent say extending the cuts for all would be best. That is more than twice the proportion who hold that view outside the U.S.
The quarterly Bloomberg Global Poll of investors, traders and analysts is based on interviews with a random sample of 1,408 Bloomberg subscribers. The poll has a margin of error of plus or minus 2.6 percentage points.
More than half of respondents (54%) polled say they think this year’s passage by Congress of an overhaul of U.S. financial regulations will weaken Wall Street’s profitability for the next few years. Almost a third (29%) says it won’t affect profitability, while 10 percent say it will strengthen earnings. Among U.S. investors, 65 percent say it will weaken Wall Street’s profits.
A fifth of subscribers (21%) say their own companies have been affected a fair bit or a great deal by the new rules, while 31 percent say just some. Among those who say their employers have been affected at least some, 51 percent say it has been bad for the company’s profitability.
One of the few pieces of good news for Obama in the survey is that global investors view him much more favorably than they do his predecessor, George W. Bush. Only 25 percent give Bush a favorable rating, while 71 percent say they view him unfavorably. The former president does better among U.S. respondents: 45 percent view him favorably and 52 percent unfavorably.
