The latest Bloomberg Global Poll (November 29) indicates that investors are increasingly optimistic due to China’s improving prospects and a rising expectation that the U.S. will avoid the so-called “fiscal cliff.” Highlights from the 862 poll respondents are:
The world economy is in its best shape in 18 months. Two-thirds of investors polled think the global economy is either stable or improving (up from just over half in September).
Three out of four respondents expect Washington politicians to reach an agreement to avoid the fiscal cliff.
Stocks are the asset of choice, with the U.S. and Chinese markets the most attractive and European Union markets the least. About half of the investors plan to increase their exposure to stocks in 2013.
Home prices as well as stock prices will rise in 2013, which will improve the wealth effect and boost consumer confidence and spending.
Bonds are the least appealing asset (trailing stocks, real estate, and commodities) and almost half of those polled intend to reduce bond holdings in 2013.
The above views expressed by participants in the Bloomberg poll echo Marietta’s October 1 Outlook, indicating that our forecast has been adopted by a majority of the international investor community.