Equities are rallying on optimism about strong growth and lower inflation, but many investors aren’t confident the rally will continue, according to a Bank of America (BofA) fund manager survey. rice field.
About 66% of those who took part in the February survey said the current rally in stocks was just a rally in a bear market, suggesting they expected it to head for new lows. Meanwhile, 24% of respondents expect a global economic recession, down from a peak of 77% in November. Growth pessimism fell to its lowest level in a year, with 83% expecting inflation to ease further over the next 12 months.
Meanwhile, strategist Michael Hartnett said the stock’s positioning is still too light to trigger an immediate sell-off. About 31% are underweight equities, down from their September peak of 52% but still high by historical averages. Allocations to cash fell this month to levels seen last February just before the start of the war in Ukraine.
Source: Bloomberg
U.S. and European stocks entered a bear market in 2022, but this year has been driven by hopes that central banks will ease the pace of rate hikes on signs of lower inflation, optimism about China’s reopening, and falling natural gas prices in Europe. It is rising.
Hartnett, who was generally bearish on stocks last year, recommended last week to sell if the S&P 500 rose above 4,200, about 1.5% above its recent close.
The CPI announced on the 14th is the key to the turning point in the US stock market rise-BofA
BofA conducted a survey of 262 fund managers with total assets under management of $763 billion (about 101 trillion yen) from 2nd to 9th. The outlook for corporate profits is improving, but remains bearish, the survey showed.
Macroeconomically, stagflation was seen as the most likely scenario, with 83% expecting below-trend growth and above-trend inflation over the next 12 months.
The biggest tail risks were persistently high inflation and worsening geopolitical conditions, a deep global recession, a stubborn central bank hawkish attitude, and a systemic credit event.
Original title:BofA Survey Shows Investors Don’t Expect the Stock Rally to Last(excerpt)
