American markets favored by 54 percent in poll as world worsens

(Bloomberg) — International investors are the most bullish they’ve been on the U.S. markets in more than five years as America is seen as a bright spot in an otherwise worsening global economy, according to the latest Bloomberg poll.

As the World Economic Forum’s annual meeting gets under way in Davos, Switzerland, 54 percent of Bloomberg subscribers surveyed last week said the U.S. will be among the markets offering the best returns over the next year. That’s a five- point jump from the previous poll in November and the highest rating for any country since the survey began asking that question in October 2009.

More than three in five said the U.S. economy is improving while 40 percent saw global output as deteriorating, the worst world reading in the Bloomberg Global Poll since September 2012.

“The U.S. will profit from flight to safety” as investors flee other markets for America’s, Wilhelm Schroeder, a poll participant and managing director at Munich-based Schroeder Equities GmbH, said in an e-mail. 

A majority of those surveyed forecast that the Standard & Poor’s 500 Index will rise over the next six months, while only a quarter see it declining, according to the Jan. 14-15 survey of investors, analysts and traders who are Bloomberg subscribers. The stock gauge rose 0.2 percent to 2,022.55 on Jan. 20 in New York.

U.S. employment

The U.S. job market had its best year in 15 years in 2014 as employers added about 3 million workers to their payrolls, based on data from the Labor Department in Washington. Buoyed by the improving labor market and falling gasoline prices, consumer confidence is at an 11-year high, University of Michigan figures released last week showed.

“Given the strength in consumption and its leadership role in energy production, the U.S. has taken on a major role in leading global growth,” Robert Sinche, a poll participant and global strategist at Amherst Pierpont Securities LLC in Stamford, Connecticut, said in an e-mail.

President Barack Obama extolled the progress the U.S. has made, telling Congress in his annual State of the Union address on Jan. 20 that the economy had a “breakthrough year” in 2014.

Federal Reserve Chair Janet Yellen deserves some of the credit, the poll results suggest. More than three-quarters of those surveyed gave her a favorable rating, her best grade since taking the helm of the U.S. central bank a year ago. A majority said Yellen has got monetary policy “about right.”

Europe’s weakness

The euro area stands out as a weak spot in the poll, with about two-thirds of investors saying its economy is losing ground. Ninety-four percent say disinflation or deflation will be a greater risk for the region over the next year than inflation.