Corporate Press Release
Political Risks Dampen Short-Term Outlook, According to Investors at Credit Suisse’s Third Annual Global Macro Conference in New York
"Euro break up fears, China slowdown fears, near-zero rates in the developed world, continued turmoil in the Middle East and a gyrating outlook for growth in the United States are just a few of the major issues facing markets, all against a backdrop of an opaque and evolving regulatory framework," said Eric Miller, Co-Head of Securities Research & Analytics at Credit Suisse. "Our Global Macro Conference puts all these issues out on the table with views and analysis to help clients separate the facts from the noise and make sound investment decisions."
Bearish in the Short Term, Bullish Longer Term
Responses from investors at the conference were especially telling about the intense focus on political risks in the near-term. 29% of investors believe there will be a Greek exit from the euro zone by the end of 2012, and 42% think that should Greece exit the euro, it will lead to an eventual full-fledged breakup of the euro currency. For the U.S., 70% of respondents believe the top priority for investors is fiscal reform, yet only a very small portion – roughly 3% ¬– expect that Washington will be able to effectively tackle fiscal issues by year-end 2013.
The focus on short-term political challenges is leading to a more bearish-than-usual outlook for stocks, with only 59% of respondents saying equities are a preferred asset class over a one-year horizon. That contrasts with 88% who prefer equities over a 10-year horizon. Over that decade period, 29% of the respondents believe that Europe will provide the best risky asset returns, while 29% believe the best returns will come from emerging markets excluding China.
Other poll results included:
- 59% believe the U.S. will enter a new recession before the end of 2014
- 6% think China will have a hard landing (<7% GDP, 2 or more quarters) in the next 12 months
- 69% believe the first U.S. Fed rate hike will be in 2014 or later
- 48% believe that Brent oil will be less than $100/barrel at the end of 2012
- 68% expect global technology to outperform any other sector over the next 12 months
Further results from the investor poll are available on request.
Credit Suisse’s Global Macro Conference
Credit Suisse launched the Global Macro Conference in 2010 as a unique annual forum to bring clients face-to-face with the world’s preeminent financial, governmental, and academic experts from inside and outside Credit Suisse. A joint effort from the Bank’s Research and Securities departments, the conference has quickly become one of the pre-eminent forums for thought leadership on global investing.
Presentations, panels and keynote speeches were delivered by a global lineup of government and industry experts. Among this year’s top external speakers and panelists were Peter Thiel, Founder of Clarium Capital Management; Rodgin Cohen, Senior Partner at Sullivan and Cromwell; Glenn Hubbard, Dean of the Graduate School of Business at Columbia University and Nirupama Rao, Assistant Professor of Economics and Public Policy at New York University.
Credit Suisse experts on hand included Chief Economist Dr. Neal Soss; Non-Japan Asia Economist Dong Tao; Mike Williams, Deputy Head of Americas Public Policy; Head of Global Demographics and Pension Research Amlan Roy; Global Fixed Income Strategist James Sweeney; Global Head of Equity Strategy Andrew Garthwaite; Head of Energy Research Jan Stuart; Head of Market Strategies Sean Shepley; and Head of Credit Strategy William Porter.
The conference also serves as a showcase for Credit Suisse PLUS, the bank’s innovative source of client-focused electronic solutions that span research, analytics and trading. Credit Suisse PLUS has recently broadened its offering of electronic solutions across interest rate products, structured products, foreign exchange and credit.