Silke
15.05.2001, 19:10
Recovery nigh but inflation fears rise
By Craig Tolliver, CBS.MarketWatch.com
Last Update: 12:59 PM ET May 15, 2001
LONDON (CBS.MW) -- Fund managers are positioning themselves for a global economic recovery but now harbor greater fears of rising inflation, according to the May Merrill Lynch Fund Manager Survey.
The independent survey of 249 mangers worldwide found 11 percent of respondents to be optimistic about a market upswing. While low, the finding is significant because it's the first positive reading by the indicator this year.
"Global fund managers see the light at the end of the tunnel," said David Bowers, Merrill Lynch Chief Global Investment Strategist. "Investment managers truly believe that a global recovery is on the horizon."
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Bowers also noted that fund mangers are seeing a brighter earnings environment ahead and are showing an increased appetite for risk in investing.
Inflation fears still linger, however, with nearly 55 percent of fund managers expecting that core global inflation rates may be unchanged or higher in a year, compared with 40 percent last month.
While the majority of managers expect interest rates to go lower in the coming months, many doubt that they will. About 28 percent of those polled see higher rates ahead, twice that of last month.
Regionally, U.S. equities scored the highest with more than a third of fund managers viewing corporate earnings to be "best" in terms of volatility, predictability and visibility.
On a valuation basis, however, U.S. stocks are still considered to be the most expensive on a relative basis, said 41 percent of managers.
Among sector managers, interest in technology is returning with the number of fund managers who said they would be investing in technology stocks rising to 9 percent from 4 percent last month.
"Fund managers are sensing that the technology water is getting warm enough to stick more than a toe in," Bowers said.
About 25 percent of those surveyed plan to move away from defensive stocks and boost their positions in technology. Many managers were also favoring energy and banks.
The survey was conducted last week, with the bulk of responses included before the European Central Bank rate cut was issued on Thursday
By Craig Tolliver, CBS.MarketWatch.com
Last Update: 12:59 PM ET May 15, 2001
LONDON (CBS.MW) -- Fund managers are positioning themselves for a global economic recovery but now harbor greater fears of rising inflation, according to the May Merrill Lynch Fund Manager Survey.
The independent survey of 249 mangers worldwide found 11 percent of respondents to be optimistic about a market upswing. While low, the finding is significant because it's the first positive reading by the indicator this year.
"Global fund managers see the light at the end of the tunnel," said David Bowers, Merrill Lynch Chief Global Investment Strategist. "Investment managers truly believe that a global recovery is on the horizon."
FRONT PAGE NEWS
U.S. shares trade mixed; Nasdaq gains traction
Aggressive Fed may be nearly done, pros say
Retail investors stay on Fed watch--and sidelines
Is it art, or just another ad?
Market news and more! Sign up to receive FREE email newsletters
Get the latest news
24 hours a day from our 100-person news team.
Bowers also noted that fund mangers are seeing a brighter earnings environment ahead and are showing an increased appetite for risk in investing.
Inflation fears still linger, however, with nearly 55 percent of fund managers expecting that core global inflation rates may be unchanged or higher in a year, compared with 40 percent last month.
While the majority of managers expect interest rates to go lower in the coming months, many doubt that they will. About 28 percent of those polled see higher rates ahead, twice that of last month.
Regionally, U.S. equities scored the highest with more than a third of fund managers viewing corporate earnings to be "best" in terms of volatility, predictability and visibility.
On a valuation basis, however, U.S. stocks are still considered to be the most expensive on a relative basis, said 41 percent of managers.
Among sector managers, interest in technology is returning with the number of fund managers who said they would be investing in technology stocks rising to 9 percent from 4 percent last month.
"Fund managers are sensing that the technology water is getting warm enough to stick more than a toe in," Bowers said.
About 25 percent of those surveyed plan to move away from defensive stocks and boost their positions in technology. Many managers were also favoring energy and banks.
The survey was conducted last week, with the bulk of responses included before the European Central Bank rate cut was issued on Thursday