...Emerging Market Risk Dominates: Survey respondents see contagion from emerging markets (EM) as the top risk to U.S. credit markets, with Brazil and China identified as the two most likely sources. EM corporates were also the least-favored asset class ¡ nearly three- quarters of those surveyed picked this as their least favorite investment choice. Ninety-three percent say they expect fundamental credit conditions for EM companies to deteriorate over the next year, making it the asset class with the most negative outlook, ahead of high yield. These sentiments are in line with findings in our recent Europe survey. Less Bullish U.S. Outlook: Investors scaled back their expectations for economic growth in the U.S., extending the trend since February 2014. While 84% believe the growth rate will be 2%-3%, none of the respondents anticipates a higher pace. This contrasts with more optimistic views on the labor market, while home price expectations remain in the stable/modest increase territory....
