BofAML June Global Fund Manager Survey - most bearish survey of investor confidence since the GFC
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