The European Debt Crisis Is No Longer The Biggest Worry Among Money Managers

students vintage test

Photo: Wikimedia Commons

For the first time in over a year global investors think the U.S. fiscal cliff is more of a risk to the global economy than Europe’s sovereign debt crisis. This is according to a survey conducted by Bank of AmericaAnd more of them think the economy will go over the fiscal cliff under president Obama.

The survey of 253 panelists with $681 billion of assets under management (AUM) was conducted between September 7 to September 13.

Here are some highlights:

On the U.S.

  • The U.S. fiscal cliff is seen as more of a risk than the European debt crisis for the first time since April 2011. 
  • 38 per cent think a fiscal cliff is more likely under president Obama, compared with 26 per cent under a Romney presidency.
  • Investors cut their U.S. equity holdings for a third straight month. 58 per cent think U.S. stocks are overvalued, the highest level since 2004.

On Europe

  • 42 per cent no longer expect a Grexit. Meanwhile, those who do expect it to leave have pushed their expectations further. 
  • The per cent of investors who most fear the European sovereign risk fell to 33 per cent, from 48 per cent in August.
  • Pessimism among European investors is declining. “European investors are equally split on whether region’s economy will strengthen or weaken in the next 12 months – whereas in August a net 23 per cent said it would weaken.”

On China

  • Growth expectations for China rose to their highest level since October 2010.

On the global economy

  • A net 20 per cent of investors think global fiscal policy is too restrictive.
  • 14 per cent think the global economy is in the recession phase, the highest level since December 2011. But 68 per cent think the economy is in the mid-late cycle in maturity.  
  • Concerns about inflation were at a 15-month high.

Don’t Miss: China Crash 2012 – Here’s Why It’s Finally Happening >

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.