MercoPress. South Atlantic News Agency

US behind Brazil, China and India as preferred place to invest, says Bloomberg

A majority of respondents support Bernanke performance and the Fed’s policies

The United States has fallen behind emerging markets Brazil, China and India as the preferred place to invest, according to a survey from Bloomberg. The US ranked first three months ago in the last quarterly Bloomberg Global Poll.

But in the September poll of 1,408 investors, analysts and traders who are Bloomberg subscribers, respondents rate the US fourth for potential returns over the next year, behind Brazil and China, tied for first, and India, in third place.

The US economic situation “is obviously unsustainable, and the concerted attempt to suspend disbelief is playing increasingly poorly abroad” says poll respondent Eric Kraus, chief strategist for Otkritie Brokerage House in Moscow.

“One can delay, but no one can forestall the un-wind of a multi-decade credit bubble.”

Economic reports released since the June poll show US GDP growth slowed to 1.6% in the second quarter from 3.7% in the first quarter. In the final quarter of last year, GDP grew at a 5% annual rate.

Expectations for US GDP growth next year have dropped to a median forecast of 2.5% in September from 2.9% in June, according to Bloomberg’s monthly survey of economists.

Since the June survey, US stock markets have been on the rise. The S&P’s 500 Index has risen 3.62% since the last investor poll was completed June 3. That’s not as much as Brazil’s Bovespa Index, which is up 10.56% and India’s Bombay Stock Exchange Sensitive Index, which is up 10.44%. The U.S. stocks still did better than China’s Shanghai Stock Exchange Composite Index, which has risen 1.41% since June 3.

Two-thirds of investors say they believe Federal Reserve policy makers will ease monetary policy through bond purchases by the end of the year. A similar 65% majority say the Fed bond purchases won’t boost U.S. economic growth.

Overall, investors give the central bank favourable marks, with a 57% majority believing its monetary policy is “about right.” More say it has been too aggressive, the view of 26%, than say it has been too timid, a view held by 14%.

Fed Chairman Ben S Bernanke is viewed favourably by 71% of respondents, up from 67% in June. He ranks highest in a list of eight global leaders and policy makers that includes President Obama, German Chancellor Angela Merkel and European Central Bank President Jean Claude Trichet.

Only 1 out of 6 investors believes the US economy is currently improving, though a 45% plurality considers the US “stable.” Another 37% believe the US is deteriorating.

The poll also shows that confidence in the US dollar has slipped since June, when 63% of investors believed the US currency would rise against the Euro during the following three months. Forecasts are now evenly divided: 34% now expect a stronger dollar in three months; 32% expect little change; and 30% a weaker dollar.

The Bloomberg Global Poll was conducted by Selzer & Co., of Des Moines, Iowa, and has a margin of error of plus or minus 2.6 percentage points.