Institutional money managers are less confident in their outlook for the U.S. economy, although they do not expect a recession and they see some positive factors, according to a second-quarter survey of managers in the Northern Trust Multi-Manager Investments platform.
Eighty-two percent of surveyed managers believe a more severe U.S. slowdown will occur as a result of a recession in Europe but only 9% foresee a full-blown U.S. recession.
Forty-one percent of managers believe Greece will remain in the eurozone, while 29% believe the country will exit the monetary union relatively smoothly.
“Generally managers aren't expecting things to be a doomsday scenario, which is a little better than one would anticipate,” said Kelly Finegan, investment analyst and co-author of the survey.
“I think it's clear (Europe) might be a little bit of a more negative impact on the U.S. but by no means will put it into a recession.”
Along with the belief in a slowdown, managers are less optimistic about GDP growth, with 20% seeing U.S. GDP growth accelerating, down from 43% in the first quarter. The percentage is the lowest since the first quarter of 2009, according to the survey.
Fifty percent believe GDP growth will remain the same, up from 43% the previous quarter and 30% believe growth will decelerate, up from 13% the previous quarter.
Managers' confidence about the U.S. job market and corporate earnings also fell in the second quarter.
Forty percent of managers expect job growth to decelerate, compared to 16% in the first quarter, while 37% believe growth will remain stable, down from 49% from the previous quarter.
Thirty-three percent of managers foresee a decrease in corporate earnings, compared to 23% in the first quarter.
There is an increasingly positive outlook, however, on housing prices, with 33% of managers seeing housing prices increasing in the next six months up from 24% the previous quarter. This is the highest percentage since the third quarter of 2008.
“It's been single digits for a long time,” said Ms. Finegan.
Northern Trust surveyed 102 managers in mid-June.