This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Northern Trust Survey: Institutional Managers See U.S. Economy Improving, Equity Correlations And Volatility Coming Down

Institutional investment managers are becoming increasingly positive on the U.S. economy, but remain concerned about macro risks such as the European debt crisis, according to a survey conducted in the first quarter of 2012 by Northern Trust. A large portion of managers also believe that correlations between equities will begin to move lower, after reaching record highs in the fall of 2011.

The survey of 100 institutional managers, conducted in mid-March by Northern Trust’s Multi-Managers Solutions group, showed a meaningful increase in positive expectations for the U.S. economy over surveys taken in previous quarters. Nearly half (49 percent) of managers expect GDP growth to accelerate over the next six months, up from 29 percent in the fourth quarter of 2011.

Managers also remain confident in corporate earnings; in fact, more than three-quarters anticipate earnings growth will remain stable or accelerate throughout 2012. The outlook for job growth in the United States remains favorable, with 33 percent of respondents expecting a pick-up in job growth and 49 percent expecting job growth to be stable over the next six months. The biggest threat to equity markets remains the situation in Europe followed by domestic concerns, such as the impact of the U.S. elections and the U.S. sovereign debt level.

“Despite continuing concern about the situation in Europe, institutional investment managers saw more positive economic and financial market signals in the first quarter this year than they did at the end of 2011," said Chris Vella, Chief Investment Officer for Northern Trust’s Multi-Managers Solutions group. "For example, 40 percent of managers believe market volatility will decline from current levels. Lower volatility combined with lower correlations between equities should benefit bottom-up, fundamentally focused investment managers."

Forty percent of managers surveyed believe correlations among equities should move lower over the next six months. Correlations among equities reached record-high levels in late-2011.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs