Due to decreased fears about recession and inflation, mutual fund managers' expectations for strong performance by emerging markets stocks has risen, The Wall Street Journal reports, citing the monthly Merrill Lynch fund managers survey.
Only 7% of fund managers in September said they believe a global recession is possible, down from 12% in August, and only 3% think inflation will rise a year from now, down from 50% three months ago. Those who would remain underweight in emerging markets stocks fell to 12%, down from 16% in August.
"Fund managers have returned from their summer holidays more upbeat about the global economy," Merrill Lynch concluded.
However, that good news was dampened by the outlook for corporate earnings, with 54% saying they believe they will decline, up from 52% the month prior and 44% in July. This is the most pessimistic fund managers have been about corporate earnings since 2001, Merrill noted.
Nonetheless, many believe the Federal Reserve is done raising interest rates, making them more willing to take on risk by putting more cash to work in the markets.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.