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.

According to the survey, no fewer than 40% of the big money crowd are going to overweight emerging-market equities over the next 12 months. Forty percent. That's near record levels.

And it eclipses every other region.

Compared to this Cinderella, every other stock market looks like a really, really ugly stepsister.

A net balance of fund managers are actually underweight the U.S., eurozone and Japanese stock markets.

No fewer than 51% of fund managers polled said emerging markets offered the best profit outlook.

Of course, it's also true that the same money managers admit emerging markets are starting to look overvalued. And that profits there are more volatile, and less reliable, than anywhere else.

Sure, maybe I'm just being a curmudgeon.

Hey -- we're talking Asian Tigers. We're talking Latin America. We're talking Russia. What could possibly go wrong?

If Merrill's latest survey points to any opportunities, they may lie in banking stocks. Yes, the ones that keep coming out with bad news. The ones everyone is too terrified to own. And that's precisely why they may offer opportunities for brave contrarians.

The shares are, after all, still flat on their backs -- two months after the rest of the market started rallying.

According to Merrill, fund managers remain heavily underweight the entire sector, even though they concede it is now looking cheap. The money managers, with their quarterly review meetings in mind, are just too afraid to invest.

So Citigroup ( C) is now yielding 4.8%, Bank of America ( BAC) 5.1%, Washington Mutual ( WM) 6.8%.

Wall Street banks like Morgan Stanley ( MS), JPMorgan ( JPM) and even Merrill Lynch itself, are at -- or near --12-month lows.

This, at a time of falling interest rates.

Twice in the recent past have fund managers shunned banks and other financial stocks on this scale. Once was mid-2004, the other mid-2005. Both times, those stocks then outperformed.
In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.