Summary: In the Russell Investment Group’s recent Investment Manager Outlook quarterly survey, 35% of money managers think that U.S. stocks are undervalued. While none of those surveyed believe that the U.S. is headed towards a recession, half see economic growth below the 2.9% annualized rate realized in the second quarter. 58% of money managers favored U.S. large-cap growth stocks, 29% favored cash, and real estate trailed the pack, with only 5% of manager favoring the sector. Believing that the Fed will need to cut rates, 36% of the survey participants were bullish on Treasuries and 53% were bullish on financial services stocks. On the international scene, the survey showed that 52% of money managers were bullish on developed markets and 37% were bullish on emerging markets.
Related links: Full WSJ article • Barron's Analyst Roundtable Q4 Forecast • Four Questions to Ask Yourself in this Market Climate • Markets Back Off: Taking a Breather or Rolling Over? • Will Mega-Caps Lead the Way? • John Hussman: Stocks Need to Shed 10% Before Initiating Speculative Positions • The Economy's Wake-Up Call: Are Investors Listening? • The Internal Strength of This Market Is Absent
Potentially impacted stocks and ETFs: iShares S&P 1500 Index (ISI), iShares Russell 3000 Index (IWV), iShares NYSE Composite Index (NYC), streetTRACKS Total Market ETF (TMW), iShares Lehman 1-3 Year Treasury Bond (SHY)
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