Investors, analysts and traders seem to think the U.S. will weather the European financial crisis and avoid a recession to be one of the top performing markets in 2012.
Americans might be rather pessimistic about the future state of the country’s economy, but international investors seem to believe that the U.S. will perform better than any other country over the next year, according to a Bloomberg poll.
The respondents — investors, analysts and traders — seem to think the U.S. will weather the European financial crisis and avoid a recession; something the Fed doesn’t feel too positive about. In September, less than a third said the U.S. would be a top performing market in 2012, but in December 41% seem to think so.
Despite the Fed’s prediction that the U.S. has more than a 50% chance of sliding into another recession, less than 25% of the respondents seem to think so. In September they were more in line with Fed thinking with half expecting an economic contraction.
In the next six months, 43% expect to increase exposure to stocks, up from 39% in September, and almost half expect the S&P 500 to rise in the next six months.
Respondents believe that prospects for the global economy are improving, although more than half still believe it is deteriorating. In September, 68% said the world economy was deteriorating compared to 54% in December. Belief in Europe, however, is not very strong. Respondents said that the European Union will suffer the worst returns in 2012, and they plan to steer clear of Europe.
Also, investors are looking to increase holdings of commodities — about 25% now compared to 19% in September — and less are planning to build up their cash reserves — only 36% will down from 42%.