Global fund managers see a 40 per cent chance of a US recession, a survey commissioned by Merrill Lynch said today.
They see the US earnings deteriorating - US based managers have downgraded their rolling 12-month growth forecasts to just 3.3 per cent. This is the lowest level since September 1998.
Equity markets are unlikely to fall further and most would buy on any significant dip.
Commenting on the outlook for global equities, Mr Owen Evans, global strategy analyst at Merrill Lynch said "We agree that any further fall in equity prices is a buying opportunity".
Mr Evans said "Three factors suggest caution on more cyclical assets. First, fund managers continue to see monetary policy as too restrictive. Secondly, the Japanese equity market is still underperforming world equities and finally, earnings downgrades are continuing".
The survey combines the opinions of 249 fund managers from six different regions of the world. These funds manage $9.6 trillion in assets.
AFP
