Fund Managers See Modest Market Gains In 2nd Half
Fund managers expect the stock market will get through a bout of bearishness and post modest gains in the second half of 2001, according to a new survey released by CDC Nvest Funds, Boston, a multi-manager fund group.
The survey, which polled 29 mutual fund managers and teams at 10 different firms, shows that most managers predict modest market activity during the second half of the year. On average, they predict the Dow Jones Industrial Average will reach 10,859, up 3.4% from the second quarter of this year; the S&P 500 will reach 1,277, up 4.3%; and the tech-heavy NASDAQ will close at 2,184, a 1.1% increase.
According to the survey, fund managers are certain the Federal Reserve Boards further rate cuts will help the economy without triggering inflation. About 93% of respondents expect that the Fed will continue to navigate the remainder of the year with more interest rate cuts, while 86% predict that the inflation rate will remain the same or even fall over the next six months. Fifty-five percent anticipate no change in inflation before the end of the year, while 34% expect to see a decline.
Fund managers, however, are divided over whether technology will help the market bounce back over the remainder of the year. Forty-one percent believe technology will rebound and lead the market, while another 41% list technology as a sector most likely to be a drag.