Investor Confidence in Profit Growth “Deteriorating” — BofA
Fewer investors than at any time since April 2009 believe that corporate profits can grow by more than 10%, according to the July survey of fund managers by BofA/Merrill Lynch, a division of Bank of America Corp. (NYSE: BAC). Some…
From the press announcment:
July’s survey highlights that corporate profit expectations have to catch up with the downgrade in the economic outlook we have seen the past two months,” said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research. “Rising equity prices have failed to lift investor gloom and we still see a quarter of investors expecting a global recession while hopes for further policy easing have been delayed,” said Michael Hartnett, chief Global Equity strategist at BofA Merrill Lynch Global Research.
On the European financial crisis, nearly a third of respondents see a risk of a negative shock to Germany’s economy, more than triple the number from the June survey. Confidence in Ireland’s recovery has grown in July, while only 37% of those surveyed think that Greece will be able to remain a member of the single currency union.
Respondents also believe that gold is currently fairly valued at around $1,600/ounce and 12% of those surveyed think oil is undervalued. BofA/ML’s conclusion is not particularly a happy one for consumers: “The last time oil was seen as undervalued preceded a surge in the oil price.”
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
