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.
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.
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 on June 3. That’s not as much as Brazil’s Bovespa Index is up 10.56 percent and India’s Bombay Stock Exchange Sensitive Index 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.
Two-thirds of investors (67%) 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.
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 Merkel of Germany and European Central Bank President Jean-Claude Trichet.
Only 1 out of 6 investors (18%) 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.
Investors are confident the U.S. will avoid some of the worst outcomes. Seven out of 10 investors (72%) say they believe there is little or no risk of a U.S. double-dip recession. Six out of 10 (62%) investors see little or no risk of 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., a Des Moines, Iowa-based company that conducted the survey.
