Global investors increasingly prefer President Barack Obama to Republican challenger Mitt Romney and most say they believe the incumbent will remain in the White House for another four years.
Asked who would be the better leader for the global economy, 49 percent favor Obama against 38 percent for Romney, according to a quarterly Bloomberg Global Poll. In January, the two candidates tied on the question.
By the same margin, they say Obama has a better vision for the U.S. economy, according to the survey of 1,253 Bloomberg customers, who are investors, analysts or traders.
Obama “managed the U.S. economy pretty well, solving a lot of imbalances created by the previous administration,” says poll respondent Mario Di Marcantonio, 35, a senior portfolio manager at Eurizon Capital in Milan.
“I believe the second Obama term will be better than having a U-turn with Romney,” he says. “More stability will mean more visibility and more investment in the future.”
The American presidential election is dividing foreign investors and those based in the U.S., where Romney is favored across the board. U.S. investors choose the Republican candidate as best for the global economy by more than 2-to-1. Respondents outside the U.S. prefer Democrat Obama by almost 3-to-1 in the poll, conducted May 8.
Anti-Regulation
Even with global sentiment against Romney, Republican criticism of new financial-industry regulations that Obama has backed resonates, with 54 percent of poll respondents saying the rules have caused job losses.
Still, Obama’s popularity with global investors is the highest in two and a half years, at a time when political incumbents across the Atlantic, including French President Nicolas Sarkozy, are being turned out of office.
The U.S. president is viewed favorably by 56 percent of global investors and unfavorably by 40 percent.
Investors have turned more negative on Romney during the Republican primary campaign, giving him the highest unfavorable reading in the year that respondents have been asked their opinion of the former Massachusetts governor.
The onetime private-equity executive is viewed favorably by 40 percent and unfavorably by 46 percent. In May 2011, he was seen favorably by 25 percent and unfavorably by 28 percent.
Debt-Ceiling Fallout
Doyle Gustus, president and chief investment officer of Cornerstone Select Advisors LLC in St. Louis, cited Romney’s support for congressional Republicans’ “destructive” resistance to raising the U.S. debt ceiling last year.
“It was not necessary to have that debate at a time when the economy was struggling and it raises a serious question about the party’s ability to lead on economic matters,” Gustus said. “Since Romney has followed the party’s positions completely, for me, his leadership is in serious question.”
Even among U.S. investors, Obama’s standing has risen during the past four months. Thirty-one percent have a favorable opinion of the president against 27 percent in January. Seventy percent of non-U.S. respondents have a favorable view of the president, up from 65 percent in January.
Poll respondents hardly fit the demographic profile of typical Obama supporters. Almost 80 percent describe themselves as politically right of center or centrists. Ninety-five percent are men. Two out of five of those who disclosed their net worth are millionaires.
Betting on Re-Election
Investors in every region are betting on an Obama re- election. Seventy-four percent say he will either certainly or probably win another term, about the same as in January.
Investors in Obama’s America have been rewarded. The U.S. stock market’s benchmark Standard & Poor’s 500 (SPX) Index climbed about 8 percent this year and is up 60 percent since Obama took office.
Respondents are now more willing to credit Obama for improvements in the U.S. economy. Forty-seven percent say he deserves credit, the same portion as says he doesn’t. In January, 43 percent attributed improvement to him against 49 percent who didn’t.
They also see another Obama term as favorable to U.S. markets, with 48 percent saying the president’s re-election would be a “good thing” for domestic markets compared with 36 percent who predict it would be detrimental. In January, only 44 percent saw another Obama term as favorable for U.S. markets and last December 38 percent thought so.
Not Caving In
“President Obama hasn’t caved in to the arguments in favor of austerity and deserves some credit for this,” says Brandon Fitzpatrick, 34, a poll respondent and equity portfolio manager at DB Fitzpatrick in Boise, Idaho. “Given the still-weak economy, we need continued stimulus, both fiscal and monetary.”
Asked which candidate has laid out a better vision for the U.S. economic future, 45 percent chose Obama and 34 percent Romney. Another 21 percent had no idea.
As with other measures of Obama, U.S. investors diverge with their counterparts in other countries. U.S.-based investors favor Romney’s economic vision 61 percent to 26 percent; investors based in other countries favor Obama’s vision 55 percent to 19 percent.
“The Democrats have fallen into the belief that if one has made a lot of money, it must be by taking other people’s share of a fixed supply of wealth,” says Bruce Lawrence, 62, a macro strategist at Infinium Capital Management in Chicago. “I believe and hope Romney believes the supply of wealth in the world is not fixed and can be grown.”
Millionaires Negative
Within the U.S., millionaires have a more negative view of Obama than investors with a lower personal net worth. Seventy- four percent of U.S. millionaires have an unfavorable view of Obama versus 60 percent of less wealthy U.S. investors.
Romney is viewed favorably by 68 percent of U.S. millionaires versus 55 percent of less wealthy U.S. investors
Treasury Secretary Timothy Geithner, who has been exhorting European leaders to take stronger action on the region’s debt crisis, has gained popularity among poll respondents. Fifty-one percent view him positively against 38 percent negatively; a year ago, they divided almost evenly.
Members of Congress from both political parties are held in low esteem. Just 31 percent of global respondents give the Democrats a favorable rating, compared with 55 percent who view them negatively. Republicans do even worse: 26 percent view them favorably, compared with 60 percent who have a negative view.
U.S. and European respondents believe the financial system remains vulnerable in a crisis. Asked if systemic risk in the banking system has been sufficiently addressed by requlators in their own country, 53 percent of U.S. respondents said it hasn’t, as did the same portion of Europeans. Only 41 percent of Asia respondents said their regulators haven’t addressed systemic risk.
The Bloomberg Global Poll was conducted by Selzer & Co., a Des Moines, Iowa-based firm. It has a margin of error of plus or minus 2.8 percentage points.
To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net.
To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net
