×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: investors | extreme | bearishness | 575 billion dollars

BAML Poll: Investors Pour Cash Into Bonds Amid 'Extreme Bearishness'

us american currency one dollar and fifty cent coins, bonds, and cash with white space
(Tim Gray/Dreamstime)

Tuesday, 18 December 2018 09:28 AM EST

Investors approaching “extreme bearishness” on the market and growth outlook and are pouring their cash into bonds, according to the latest survey from Bank of America Merrill Lynch.

Money managers have increased their allocation to the asset class by 23 percentage points, the biggest ever one-month rotation, according to the bank’s global fund manager survey published Tuesday.

More than half of those responding -- 53 percent -- now reckon global expansion will slow over then next 12 months, the worst outlook on the economy since 2008, Bank of America says.

The greater allocation to bonds comes as inflation expectations slide, with almost two thirds of respondents saying world consumer prices won’t rise next year. The equity rout that has put global stocks on a path for one of the worst Decembers on record provided further impetus: The allocation to equities dropped 15 percentage points to a two-year low.

“All eyes are on the Fed this week,” Michael Hartnett, Bank of America’s chief investment strategist, wrote in the report. “A dovish message could equal a bear market bounce.”

Also in the poll, which canvassed investors with some $575 billion under management:

  • Net 46 percent of fund managers surveyed think corporate balance sheets are overleveraged, the highest on record.
  • Average cash balance ticks up slightly to 4.8 percent, up from 4.7 percent from last month.
  • Allocation to global equities falls 15 percentage points to a two-year low of net 16 percent overweight.
  • Worst profits outlook in a decade, with net 47 percent of investors expecting global profits to deteriorate in the next 12 months.
  • For the first time since January, Long FAANG+BAT (20 percent) is no longer the most crowded trade cited by investors, replaced this month by Long USD (25 percent).

And in terms of the biggest tail risk fears, the trade war topped the list of worries. Quantitative tightening and a slowdown in China were a distant second and third.

The survey was conducted between Dec. 7 and Dec. 13, with the global version polling 190 participants.

© Copyright 2024 Bloomberg News. All rights reserved.


StreetTalk
Investors approaching "extreme bearishness" on the market and growth outlook and are pouring their cash into bonds, according to the latest survey from Bank of America Merrill Lynch.
investors, extreme, bearishness, 575 billion dollars
337
2018-28-18
Tuesday, 18 December 2018 09:28 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved