The feeling of large investors and fund managers reflects the global market situation and explains the strong rotation of portfolios worldwide. This is shown by the latest bofa survey among the main managers of the world.
The world of international investment fund administrators does not hesitate to hide their new passion for European markets, which is reflected, for example, with The most pronounced rotation from the US to the old continent as never seen. This was also reflected in the results of the latest survey (FMS) of the Bank of America (Bofa) that even made a word game with “Eu-Irresistible” to explain the results of the FMS in Europe. The study shows that 39% net states that it is on weighted in European shares in relation to world markets, compared to 12% last month being the largest on weighting since mid -2021. On the other hand, 23% net reports that it is infraded in US actions today, the highest proportion since mid -2023. “This constitutes the most pronounced rotation of the United States to registered Europe, with data that date back to 1999”the bofa stands out.
As for the values that the fund managers like the most, the cyclicals and those of small capitalization stand out: “50 % of respondents see greater bullish potential for European cyclical values against defensivecompared to 28% last month, and Cyclic optimism now extends to small capitalization companieswith 37% who expect them to exceed those of great capitalization, the highest proportion in more than three years ”.
What also shows the survey is the change of opinion with respect to the US that looks sudden to awaken. The FMS brought with it the second largest fall in the global growth expectations in the history of the survey, the greatest fall in the allocation of US history in history, and the greatest jump in the assignment of cash since March 2020. A cocktail that reflects the loss of optimism and also quickly from global managers. To this are added stagflation, commercial war and the end of American exceptionalism, promoting the “upward fall” in the feeling of fund managers, whose speed is consistent with the “End of the correction of the Variable Income”. “Said that, No one bets on a long -term recession/bonds, the positioning of fund managers does not approach extreme bearish levels at all ”says the team led by Michael Hartnett It emphasizes that the assignments to US actions collapsed as they increased towards the eurozone and emerging markets.
Most investors do not yet predict a recession in the US
A quick look at the FMS data realizes that: the expectations of a higher global growth rate fell from -2% in February to -44% in March; The change in allocation to US actions was reduced by 40 percentage points; and the effective level of portfolios increased from 3.5%to 4.1%, moving away from the field of sale to countercurrent, which is below 4%. That said, these investors do not yet predict a recession, or therefore maintain long positions in bonds, their position is “far from the extreme low levels or buy with your eyes closed,” according to Bofa’s strategists. Only 11 % of respondents foresee a sharp landing.
A rise in S&P 500 above 6,000 in the second quarter would cause a change of course in concerns about inflation and trade waraccording to Bofa’s team. A recession, meanwhile, would drag the S&P 500 below 5,000.
From Marketwatch, Brett Arends He points out that the fund managers survey has been a reliable opposite indicator. Bofa’s own team offers tips to investors with a opposite mentality: they recommend optimistic investors who foresee a decrease in concerns about the commercial war and stagflation that open long positions in short actions and positions in cash, or that open long positions in technology and short positions in basic products. While for pessimistic investors who foresee an increase in the risk of a recession in the US, they should bet on long positions in bonds and short positions in European banks and actions, says Marketwatch Steve Goldstein.
Source: Ambito
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