Investors: World's economy in best shape in past 18 months
WASHINGTON - The world economy is in its best shape in 18 months as China's prospects improve and the United States looks likely to avoid the so-called fiscal cliff, according to the latest Bloomberg Global Poll of investors.
Two-thirds of the 862 surveyed described the global economy as either stable or improving. That's up from just over half who said that in September and is the most since May 2011.
The U.S. came out on top for the eighth straight quarter when investors were asked which markets will offer the best opportunities over the next year. China ranked second, reversing a decline to fourth in the September poll of investors, analysts and traders who are Bloomberg subscribers. The European Union, beset by a debt crisis, was seen offering the worst returns.
"The global economy is improving, recovering and healing, thanks to the U.S. and the emerging markets," said Andrea Guzzi, a poll respondent. "More people are becoming wealthy, less and less are poor."
Stocks were seen as the asset of choice, with more than one in three of those surveyed on Tuesday forecasting equities would have the best returns in the coming year. Real estate came in second: Just less than one in five investors singled it out favorably, the best showing since the quarterly poll began in July 2009. Bonds were seen as offering the worst returns.
The Federal Reserve is expected to provide continued support to the bond market after its Operation Twist program ends next month, according to the poll.
About three in four said the U.S. central bank will begin outright purchases of Treasury securities after its plan for swapping short-dated securities for longer-dated ones expires.