Her Eleftherias Kourtali
Investor fears of stagnant inflation are at their highest level since the 2008 financial crisis, while optimism about global growth has fallen to an all-time low, according to Bank of America.
More specifically, according to the standard monthly survey of BofA conducted in the environment of 300 global fund managers with total assets of 834 billion dollars, the US market officially enters the bear market, the 20th of the last 140 years with the survey marking deeper pain for investors soon.
Investors are the most underweight in stocks since May 2020, while the climate on Wall Street is very negative but stocks are not expected to have reached their lows which will be noted if and when they record highs for bond yields and inflation, something that an overly aggressive Fed needs in June and July to happen.
In addition, according to a BofA survey, global corporate earnings expectations also fell to 2008 levels, with US bank analysts noting that previous lows on these expectations had emerged during other major crises. Wall Street, such as the Lehman Brothers bankruptcy and the dotcom bubble burst.
In fact, the BofA survey was conducted just before the release of US inflation data on Friday, which “shattered” its hopes that the Fed will stop the aggressive cycle of interest rate hikes, according to Bofa general analysts led by Michael Hartnett.
73% of respondents expect a weaker economy in the next 12 months, the lowest level since the survey began in 1994, while in terms of investments, investors are long in cash, the US dollar, commodities, industries of healthcare and raw materials, in “value” and high quality stocks, and hold short positions in bonds, European stocks and emerging market stocks, technology stocks and the consumer sector.
Finally, aggressive central banks are seen by fund managers as the biggest risk to markets, followed by the global recession, inflation, a systemic event, the war in Ukraine, the pandemic and finally cryptocurrencies.
Source: Capital
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
