Views On U.S. More Positive

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    After two quarters of declining sentiment about the U.S. economy, investment managers had more positive views on the U.S. economic outlook in the most recent quarterly survey by Northern Trust Asset Management. At the same time, managers expressed doubt that negative interest rate policies introduced by central banks in Europe and Japan would help spur economic growth outside the U.S. “The outlook on U.S economic growth and corporate profits improved in the first quarter of 2016, despite the extreme market volatility that started the year,” says Christopher Vella, chief investment officer for multi-manager solutions at Northern Trust. The survey found that 37 per cent of managers expect U.S. gross domestic product to accelerate in the next six months, up from 23 per cent with that view in the fourth quarter. U.S. corporate profit expectations were also up, with 34 per cent expecting an increase in earnings, up from 23 per cent in the prior survey. Following the recent market declines, 83 per cent of managers believe global equity markets are either undervalued or fairly valued, while 17 per cent still view global equities as overvalued. Managers were most bullish on emerging market equities and 59 per cent, the highest reading since the third quarter 2014, view them as undervalued.