LONDON (AFX) - U.S. fund managers have upgraded their domestic GDP growth forecasts for 2001 and 2002, with 18 pct expecting a stronger economy over the next 12 months compared with 7 pct in January, according to the February edition of the Gallup survey commissioned by Merrill Lynch.
The survey found U.S. fund managers have raised their GDP growth forecasts to an average 3.2 pct from 2.1 pct for 2001 and 3.6 pct in 2002 after the Fed's interest rate cut of 100 basis points. However, the survey also found this optimism was coupled with a warning by fund managers that corporate earnings growth is not likely to recover until 2002.
A net 58 pct expect corporate earnings to suffer over the next 12 months and have downgraded EPS growth forecasts to 2.9 pct from 4.9 pct in January, the survey found.
A net 24 pct of U.S. fund managers believe domestic equities are overvalued, which may be explained by the expectation of slow earnings growth, the survey found.
The survey combines the opinions of 32 U.S. fund managers who together manage 2.42 trln usd of funds.