A report from Merrill Lynch shows that investors are now more worried about the “fiscal cliff” than the financial trouble of Europe:
Europe is staging a comeback in investor portfolios while concerns about the U.S. fiscal cliff have taken center stage, according to the BofA Merrill Lynch Fund Manager Survey for September.
The EU sovereign debt crisis is no longer the top tail risk identified by investors, for the first time since April 2011, having been surpassed by the U.S. fiscal cliff. The proportion of the panel who most fear EU sovereign risk fell to 33 percent from 48 percent in August. The U.S. fiscal cliff has become the biggest tail risk for 35 percent of global investors. “Investors now view the U.S. fiscal cliff as a greater threat than the eurozone — and the upcoming election is putting these fears into sharper focus,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
Douglas A. McIntyre