Bank of America / Merrill Lynch conduct the survey each month, the latest was out on Tuesday.

The bank's bottom line:

  • most bearish survey of investor confidence since the Global Financial Crisis;
  • pessimism driven by concerns over trade war/recession, monetary policy impotence, low strike prices for policy puts;
  • tactical "pain trade" is higher yields & higher stocks, especially if Fed cuts 25bps Wednesday.

The bearishness despite (because of?) surging stock markets.

More - some of the highlights pertinent to the equity markets from the results (bolding mine):

Cash bulls: FMS cash level soars to 5.6% from 4.6%

  • biggest jump in cash since 2011 US debt ceiling crisis.

Equity bears: 2nd largest drop in equity allocation ever (largest occurred Aug '11); and FMS relative allocation of equities over bonds drops to lowest since May '09.

Macro bears: global growth expectations plunge by largest amount since the Nov 1994 FMS ("Tequila crisis");

  • 2nd biggest ever drop in EPS expectations;
  • record number of investors say economy "late-cycle";
  • trade war "fear" highest since Jul '18.

Policy bears: FMS investors have low strike prices for both the Fed put & the Trump put...S&P 500 level at which investors expect Fed to cut = 2430, at which Trump cuts comprehensive trade deal = 2350.


FMS is Fund Manager Surve.

  • Survey period 7th to 13th June 2019.
  • An overall total of 230 panellists with $645bn AUM participated in the survey.
  • 179 participants with $528bn AUM responded to the Global FMS questions