The worlds biggest investors say the rout that erased $1 trillion from the value of global equities after President Barack Obama was re-elected overlooks the fact that the world economy is improving while U.S. leaders start discussions that may avoid the so-called fiscal cliff.
Money managers at firms overseeing more than $8 trillion said investor concern that the U.S. economy will slow as Obama and Congress fail to avert $607 billion in tax increases and spending cuts next year are overblown. U.S. stocks had the biggest weekly decline since June while yields on Treasuries fell to two-month lows and gold advanced the most since September.
From jobs to housing, and from consumer confidence to international trade, U.S. data show the worlds largest economy is strengthening. In China, the second-largest, exports rose about 10 percent in both October and September from a year before, up from gains of less than 3 percent the prior two months. Companies worldwide from the most creditworthy to the neediest are borrowing in capital markets at the second-fastest pace on record and at the cheapest rates ever.
Its astonishing that now the market is turning so quickly and we dont understand that, said Bettina Mueller, a money manager in Frankfurt at Deutsche Bank AGs DWS Investments unit, which oversees about $350 billion. Our expectation regarding the fiscal cliff is that both sides will come to a compromise.
Widespread Carnage
