Stocks may be recovering from their March lows, but investor pessimism over the pandemic’s economic damage is at “extreme” levels with cash positions the highest since the 9/11 terrorist attacks, according to a Bank of America Corp. survey.

Fund managers have shunned risk, with equity allocations the lowest since the 2009 financial crisis, the poll conducted between April 1 and April 7 shows. Cash levels surged to 5.9% from 5.1% in March, signaling peak pessimism to BofA strategists.

Global equities have rallied more than 20% from their March lows on optimism over fiscal and monetary stimulus in addition to a slowing in new virus cases in key infection hotspots such as New York and Spain. However, many market players remain hesitant to call the bottom of the sell-off in stocks as the full economic impact of national lockdowns is yet to be revealed.

Even though such elevated cash levels set off BofA’s buy signal for risk assets, the strategists led by Michael Hartnett recommend taking profit on the S&P 500 at 2,850 to 3,000 points -- levels as much as 8.6% higher than Monday’s close.

An overwhelming, record-high 93% of surveyed fund managers expect a recession in the next 12 months. At the same time, investors think cuts to global gross domestic product projections are largely behind us, while reductions to earnings per share are just starting.

When predicting the pace of the recovery, 52% of those polled expect it to be U-shaped, or one where economic indicators gradually rise back over time, compared with just 15% who see a more rapid, V-shaped rebound.

Surveyed fund managers believe that credit default risk poses the biggest threat to financial markets. Amid concerns about reduced cash flows and elevated leverage, an historically high 79% of investors want to see companies improve their balance sheets. When asked about the biggest tail risks, a second wave of coronavirus infections was identified as the top danger, according to BofA.

A total of 183 participants who oversee $545 billion in assets took part in the April Bank of America global survey.