Share sentiment on equities and global growth among fund managers interviewed by Bank of America (BofA). The bank’s monthly survey of global fund managers “shouts for investor capitulation and the beginning of policy capitulation,” wrote analysts led by Michael Hartnett predicting that shares will bottom out in the first half of 2023after the Federal Reserve ends its interest rate hike.
From Bofa’s monthly survey of managers, a very strong pessimism emerges, given that the cash amount at 6.3% is at the maximum since April 2001 (well above the historical average of 4.8%) and the positioning on global equity is 3 standard deviations lower than the long-term average (49% of managers say they are underweight). Both are important contrarian indicators that confirm widespread pessimism.
Il Bitcoin it should have seen a recovery in October, a seasonally bullish month. So far, however, the rebound has remained elusive as watchful investors continue to park their money in the US dollar. The survey conducted by BofA revealed that the “long dollar” – or taking a bullish exposure on the greenback – was the trade of choice for the month of October, with 64% of respondents calling it the bet. more crowded. The greenback has always been the most sought-after asset since July, thanks to the continuous efforts of the Federal Reserve to control inflation with unusually large interest rate hikes that raised the benchmark rate by 300 basis points in six months.
The Fed tightening has shaken riskier assets, including cryptocurrencies, and sent the dollar up. “Market liquidity has deteriorated significantly,” BofA analysts said, noting that investors have 6.3% of their portfolio in cash, the highest since April 2001, and that 49% of participants are underweight in equities. Nearly a record number of respondents said they expect a weaker economy over the next 12 months, while 79% predict inflation over the same period, according to a survey of 326 fund managers with $ 971 billion under management. . “While until last month the stock market was immune from sentiment until last month, it has begun to better reflect investor pessimism,” Hartnett wrote.
As the earnings season picks up, 83% of investors expect global earnings to deteriorate over the next 12 months. A stark 91% said global corporate earnings are unlikely to rise 10% or more in the next year, the lowest since the global financial crisis, a signal that suggests a further decline in S&P 500 earnings estimates. Global markets have risen in recent days thanks to support for technical levels, changes in UK government policies and a focus on earnings. attention to profits. Hartnett and his team described the rally following the release of US inflation data last week as a “bear hug”.