Merrill Lynch survey shows bullish sentiment
Investors are bullish on global growth as fears of QE recede, while outlooks on emerging markets are turning bearish, according to the BofA Merrill Lynch Survey of Fund Managers for March.
A net 28% of investors surveyed expected the world economy to strengthen in next year, over a net 11% in February. A net 6% of the global panel expects corporate profits to improve in the coming year. A month ago, a net 11% predicted profits would decline.
The survey of 278 panellists with US$796bn of assets under management was carried out from March 9 to 15, A total of 212 managers, managing US$639bn, participated in the global survey. A total of 145 managers, managing US$354bn, participated in the regional surveys.
This month sees an even split between global managers with positive and negative outlooks on the Eurozone economy. In February, a net 35% predicted the economy would deteriorate. The numbers naming EU sovereign debt as their number one “tail risk” have declined sharply to 38% this month from 59% in February. In the Eurozone regional survey, a net 7% expects corporate earnings in the Eurozone to deteriorate in the coming 12 months, down from a net 39% in February and a net 84% in December.
Fear of QE seems to be lessening. 47% expects no further QE in the U.S., up from 36% in February. 39 % predicts the European Central Bank will not extend QE, up from 23% a month ago. However, investors foresee higher inflation with a net 13% expecting it to rise in the coming year. Only last month, a net 16% predicted inflation would fall.