The latest Bank of the usa Merrill Lynch fund manager survey implies that investors have grown to be considerably less positive about the global economy.
Only eight per cent of managers polled see the global economy growing in the next Twelve months, the cheapest reading since 2012. Most respondents also see global corporate profits declining in the next 12 months.
Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, said the bearishness is sensible, particularly if his contention that a downturn is underway is true.
“Investors aren’t yet ‘max bearish,’” he said inside a release. “They’ve yet to accept that we are already well into a normal, cyclical recession/bear market.”
It is apparent that fear has increased one of the 211 managers surveyed. The money holding within an average manager’s portfolio has become 5.4 percent, the third highest allocation because the 2009 recession. A net 38 per cent of managers are overweight cash.
Fear of a meltdown in emerging-market stocks is one of the biggest weights on managers. The majority see China because the biggest tail risk undoubtedly, while bearishness toward emerging-market equities has become in the highest level since the survey began.
As for what’s still favoured: Japan and Europe stocks remain on the buying list, while the U.S. dollar continues to be one of the most crowded trades, though the survey notes that bullishness around the currency is falling after two years of gains.