Investors still bearish on US economy amid slowdown fears
foxbusiness.comGreenTech Research President and CEO Hilary Kramer and ‘The Cow Guy’ Scott Shellady discuss the Fed likely not cutting rates in 2023 or 2024, the 1Q GDP performing higher than expected and the market’s reaction.
Investors remained bearish about the state of the U.S. economy in early July despite rising bets the Federal Reserve will successfully engineer a soft landing, according to Bank of America's global fund manager survey.
Sentiment among fund managers remained «stubbornly low» this month, with the majority of investors — roughly 60% — bracing for a weaker economy over the next year.
About 45% of participants in the survey identified high inflation that keeps central banks on a hawkish trajectory as the top risk to markets. That compares to about 18% who highlighted a potential credit crunch and a global recession as the biggest threat.
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Wall Street in New York City Jan. 27, 2023 (John Taggart/Bloomberg via Getty Images / Getty Images)
Another 15% are worried about geopolitical situations, like the war in Ukraine or tensions between China and Taiwan, worsening, while just 10% fear a systemic credit event.
The poll of 262 fund managers was conducted July 6-13 and is based on cash positions, equity allocation and economic growth expectations.
Despite concerns about a weaker economy, a majority of investors see a soft landing as the most likely outcome for global economic growth and expect just a small contraction in earnings. Bets on a «soft landing» jumped to 68% in July, far higher than the 21% predicting a «hard landing» and the 4% calling for «no landing.»
Traders work on the floor of the New York Stock Exchange in New York City Oct. 31, 2016.
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