Last week's stock market tremor didn't come out of the blue.
A key but little-noticed report earlier in the week showed that big money managers remained skeptical of the monster rally that had swept the world since mid-August.
The latest Merrill Lynch (MER) monthly survey of fund managers worldwide found that they were deeply worried about the outlook for profits and economic growth in the year ahead.
According to the survey, a net balance of 55% expect global growth to weaken, compared with just 5% back in early July. And a net balance of 44% expect corporate profits worldwide to weaken, up from 12% three months ago.The survey also finds that managers are carrying more cash, and are investing on a shorter time horizon. More than a third rate liquidity conditions as "poor." Of course, it's long been known that bull markets climb a "wall of worry." As long as people are worried, there's probably more upside to come. The problem is, that would make a more compelling argument if markets were still depressed. Instead, many of them have been in orbit. From Wall Street to Beijing, share prices are a lot higher even though, apparently, the outlook has gotten worse. Despite the nerves, fund managers have been loading themselves up to the gunwales with emerging-market stocks.