- Fund manager feeling Was strongly correlated with the performance of the S&P 500. Bofa analysts led by the investment chief strategist, Michael Hartnett, said that the views of gradation on American actions led a “bull accident” in feeling, but they indicated that the speed and scale of correction increase well for the market in the future.
The optimism of money managers has Faded Fast at the start of Trump 2.0. Bank of America Global Fund Manager investigation revealed that the feeling did the start in March, which led to the second dive into global growth expectations and the greatest drop in the allocation of American actions since Bofa began to investigate in 1994.
Respondents reported that their sales characteristic has helped feed the recent correction While they parked their money on the sidelines – mirrifying the record of Warren Buffett $ 334 billion cash battery.
The most revered investor in America, however, gave a famous piece of advice In a letter to Berkshire Hathaway Shareholders in 1968: “Be afraid when others are greedy and gourmet when others are afraid.” Indeed, while Bofa analysts led by the chief strategist for investments Michael Hartnett said that the views of gradation on American actions had led a “bull crash” in feeling, they indicated that the speed and the scale of correction are increasing well for the market in the future.
Nevertheless, there is no doubt that the 171 respondents in the survey, who manage approximately $ 425 billion in combined assets, have been afraid by President Donald Trump, absolutely pricing. In February, a net 2% of investors expected a lower global economy over the next 12 months, which means that a small majority of respondents were pessimistic at the time. This number has since climbed to 44%-the worst dive of a single month in growth expectations outside March 2020, or the start of the COVVI-19 pandemic in the United States
The feeling of fund manager, said Bofa, was strongly correlated with the performance of the S&P 500.
“Pessimism on global growth prospects is bad news for actions,” the team wrote when the survey, conducted in the second week of the month, was published last week.
After victory in the Trump elections in November, hopes that the new administration would favor tax reductions and deregulation has fueled a large gathering for actions. Instead, Trump appeared obsessed with the use of prices not only as a negotiation chip but also as a tool To approach America’s trade deficit, resulting in massive uncertainty about American trade policy.
In the BOFA survey, 55% of fund managers said that a recession induced by the trade war is the largest “risk of tail” confronted with the market – the most cited factor since the “resurgence coche” in April 2020 – followed by increases in forcing inflation by the Federal Reserve and the concerns concerning the impact of the Elon Musk government efficiency department, also known as Doge.
More than 70% of respondents, on the other hand, said that they expect a form of dreaded “stagflation“Or slow down growth and an increase in inflation. None of the fund managers questioned, however, currently provides for a real recession.
Investors have reasons to encourage
It is also important to note that investigations surveys could explain much better why the actions recently sold than to report where the market is heading. In one month, the average cash managers of fund managers surveyed jumped from 60 base points to 4.1%. This marks the end of the opposite “sales signal” of Bofa or a metric that suggests an opportunity to buy a low when other investors sell, and vice versa.
This signal was initially launched in December, when the respondent’s cash allocation fell below the threshold of 4% Bofa. Since then, the Nasdaq The composite and the S&P 500 both seized the correction territory by lowering 10% or more before recovering slightly.
Obviously, managers have decided to run American stocks, with a net 23% of investors in insufficient insufficiency, against 17% overweight last month. The 40 -point drop is the largest in the history of the survey, and 69% of respondents declared the theme of “American exceptionalism” – or American actions exceeding the rest of the world – had culminated. Chinese economyIn the meantime, have become the standard.
However, Bofa’s survey said investors always expect the Fed to be on the right track to obtain a so-called “smooth landing” or inflation lowered without inducing a recession, and believe that the central bank will reduce interest rates from two to three times this year.
Friday, the S&P ended a week in the green for the first time in a month. Investors received more good news this weekend, with reports suggesting that the so-called reciprocal rates announced on April 2, that Trump ordered economic officials to design personalized to essentially all American business partners will be relatively narrow. The market applauded the news, the S&P 500 increasing 1.5% on Monday afternoon.
This story was initially presented on Fortune.com
