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Fund Managers Are Least Bullish in a Year: Bank of America Survey

'Global-growth expectations turned negative for the first time since April 2020, [based] on inflation and China pessimism,' Bank of America says.
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Bank of America’s monthly global fund manager survey in October produced the least bullish result since October 2020.

“Cash levels jumped to a 12-month high, as global-growth expectations turned negative for the first time since April 2020, [based] on inflation and China pessimism,” the bank's chief investment strategist, Michael Hartnett, wrote.

“Allocation to bonds slumped to all-time low” while allocation to stocks is “still very high,” he said.

The percentage of investors expecting growth to strengthen in the next 12 months minus the percentage of those expecting it to weaken totaled negative 6.

The percentage of managers who say profit growth will accelerate minus the percentage of managers who say profit growth will decelerate totaled negative 15. That’s the worst outlook since May 2020.

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When it comes to stagflation, a third (34%) of respondents now are concerned about it, up from 20% in September.

The net percentage of investors who are overweight equities totaled 50%. For cash the figure was 27%, for commodities 28% (up from 18% last month) and for bonds negative 80%.

The survey included 430 managers with $1.3 trillion of assets under management. It was conducted Oct. 8 through 14.

In other investment-related news Tuesday, videogame retailer GameStop  (GME) - Get GameStop Corp. Class A Report and movie-theater chain AMC Entertainment  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report firmed Tuesday, after the Securities and Exchange Commission issued a report on trading in the so-called meme stocks.

The report examined the roller-coaster trading of meme stocks in January. It put the kibosh on conspiracy theories circulating on the internet, but it also said market dynamics should be investigated.

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