The Financial Post reports in its Wednesday, Oct. 2, edition that according to a Bloomberg survey, respondents expect U.S. stocks to outperform government and corporate bonds for the rest of the year due to interest rate cuts by the U.S. Federal Reserve. A Bloomberg dispatch to the Post reports that they also prefer emerging markets over developed ones and are avoiding traditional safe investments like U.S. Treasuries, the greenback and gold.
It is a risk-on view that dovetails with bullish calls emerging on Wall Street after the Fed's half-point rate cut in September. China's biggest stock rally since 2008 after President Xi Jinping's government ramped up economic stimulus also helped boost the bullish attitude. The Fed slashed its benchmark rate from the highest level in two decades on Sept. 18, and the median official forecast projected an additional half-point of easing across meetings in November and December. Goldman Sachs analyst Lindsay Rosner says: "The Fed has a lot of room to cut, as do many other central banks. That sets up a good backdrop for the economy in the U.S., in particular. That doesn't erase the tightness of valuations, but makes them more justifiable."
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