The US stock market has officially entered a beer market. The June BofA Fund Managers Survey (FMS) is indicating a deep crisis for investors.
The survey finds that inflation will still remain high relative to history, so the most popular description of what the economic background will be over the next 12 months is ‘stagflation’, the highest level since June 2008 (83 percent). .
The survey shows an all-time low in global growth enthusiasm (net minus 73 percent). At the same time it shows the worst inflation outlook since September 2008 (Lehman), the highest inflation forecast since June 2008.
Enthusiasm over global growth has plummeted to a new low. The net percentage of FMS investors expecting a strong economy fell to minus 73 per cent, the lowest since 1994.
According to the BofA survey, global profit expectations fell to a net minus 72 per cent (from 66 per cent), the weakest since September 2008. The survey noted that a major drop in global profit expectations occurred in the Other Moments of the Wall St. Crisis (LTCM).
Investors are now telling companies to ‘keep it safe.’ Investors want companies to strengthen their balance sheets (up 44 per cent from 41 per cent, the highest since January 2021) instead of increasing capex spending or returning cash to shareholders through buybacks.
Investors are long cash, commodity and healthcare relative to the past 10 years and very underweight are equities, tech, eurozone and EMs.