A plurality - 40 percent - expects oil prices to fall in the next six months, the first time respondents felt that way since the inception of this poll in July 2009.
Fewer than 4 in 10 of those surveyed described the U.S. and global economies as improving, down from about 50 percent who felt that way back in January. U.S. economic growth slowed to 1.8 percent in the first quarter of this year, down from 3.1 percent in the final three months of 2010. Home prices fell in more than three-quarters of U.S. cities in the first quarter of 2011, according to the National Association of Realtors.
The poll, conducted May 9-10, also found that investors’ ardor for stocks is cooling. Two in 5 (40%) intend to increase their exposure to equity markets over the next six months, down from almost 3 in 5 in the last poll in January. U.S. investors in particular have become less keen on stocks: Just 37 percent say they are increasing their exposure, down from 57 percent in the previous poll.
The survey was taken after a turbulent week in the markets that saw commodity prices suffer their biggest decline in more than two years. The Standard & Poor’s GSCI Total Return Index of 24 commodities dropped 11 percent last week, led by a 27 percent collapse in silver prices. More than half (52%) of those surveyed expect silver prices to fall further in the next six months. Sixteen percent identified commodities as one of the markets that will suffer the worst returns over the next year, more than double the proportion that said that in January.
While the attractiveness of the U.S. is ebbing, it still comes out on top when survey participants are asked to name the best countries to invest in. Thirty-one percent cited the U.S. as among the markets that will offer the best returns over the next year, down from 37 percent in January.
U.S. investors are more enthusiastic about their country than those in either Europe or Asia. Almost 2 in 5 Americans picked the U.S. as a top market. Only one-third of Asians and less than a quarter of Europeans felt that way.
Brazil and China trailed the U.S. in the poll, with 1 in 4 (25% Brazil; 24% China) investors citing those countries as good places to put money. Fifteen percent singled out Japan, almost double the amount that did so in January, before the country suffered a devastating earthquake and tsunami that left 24,837 dead or missing as of May 7 and cratered its stock market.
More than 2 in 5 investors see Japan’s Nikkei 225 Stock Average rising over the next six months. That compares with about 1 in 4 who said that back in January.
The Nikkei average yesterday rose 45.50, or 0.5 percent, to 9,864.26. That’s down from 10,254.43 on March 11, the day of the earthquake.
Investors have turned less optimistic about other stock markets. Less than half (48%0 see the Standard & Poor’s 500 Index rising during the next six months; in January, almost two-thirds forecast an advance. About one-quarter in the latest poll say they expect the stock gauge to fall. The S&P 500 fell 1.1 percent to 1,342.08 yesterday in New York.
Global investors still consider equities to be among the most lucrative places for their money, with more than 1 in 3 forecasting that stocks will provide superior returns over the next year.
Asian investors are the most confident in their regional economy, with 42 percent saying it is improving, compared with 31 percent of U.S. poll respondents and 26 percent of Europeans who feel that way about their areas.
Half (50%) of global investors forecast that the MSCI Asia Pacific Index will rise over the next six months, down from 58 percent in January. The index advanced 0.5 percent to 138.64 as of 7:11 p.m. in Tokyo yesterday.
The European Union was seen by the most respondents as one of the markets offering the worst returns over the next year, with 38 percent singling it out, little changed from January. The turmoil-racked Middle East ranked second worst, with about 1 in 4 (24%) investors describing it that way, up from less than 1 in 10 in the previous poll.
About 1 in 3 (32%) investors see the Euro Stoxx 50 Index, a measure of shares in nations using the common currency, and the FTSE 100 Index rising in the next six months. That compares with more than 40 percent who forecast advances in January.
More than half (55%) of those surveyed forecast that the dollar will strengthen against the euro over the next three months. The euro tumbled 1.4 percent to $1.4205 at 4:17 p.m. in New York yesterday, from $1.4409 on May 10.
