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

Author: Eamonn Sheridan | Category: News

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. 

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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 



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