2 years ago
Investors, plagued by mounting pessimism, person sought refuge successful cash, according to a caller survey conducted by Bank of America. The survey highlights a notable 5.6% summation successful currency reserves during May, arsenic apprehensive investors brace themselves for a imaginable recognition crunch and a recession.
Flight to Safety: Investors Increase Cash Reserves and Brace for Recession
Investors are progressively gravitating towards currency reserves, arsenic indicated by a recent survey conducted by BOFA, which characterizes this question arsenic a “flight to safety” successful the realm of fiscal transactions. Notably, banal vulnerability has attained its highest truthful acold successful 2023, portion BOFA further highlights that enslaved allocations person reached their highest level since 2009.
Between May 5-11, BOFA’s researchers conducted the survey by engaging with implicit 250 planetary money managers overseeing implicit $650 cardinal successful assets. According to the BOFA poll, sentiment is souring and taking a bearish turn, with concerns looming implicit a imaginable recession and recognition crisis.
BofA's Fund Manager Survey's astir “crowded trades”
long large tech (32%)
short banks (22%)
short US dollar (16%) pic.twitter.com/wQ1PNl5Q5U
— Jonathan Ferro (@FerroTV) May 16, 2023
Approximately 65% of the planetary money managers surveyed expressed a content successful the likelihood of an economical downturn. When it comes to the U.S. indebtedness ceiling, a important bulk of the investors polled expect its summation by a circumstantial date. However, adjacent though astir money managers expect a resolution, the percent of investors holding specified expectations has declined from 80% to 71%.
The survey notes investors are gripped by apprehension implicit the prospects of a planetary recession and the imaginable for a elephantine interest complaint hike by the U.S. Federal Reserve arsenic a means to quell persistent inflationary pressures.
Fund managers besides harbor concerns regarding escalating tensions among large nations and the hazard of a contagion successful the banking recognition system. In addition, BOFA’s probe revealed the astir heavy populated stocks, with agelong tech trades claiming the apical spot connected the list.
Among the different crowded trades were bets against the U.S. dollar and U.S. banks, portion a important influx into tech stocks was witnessed, diverting attraction from commodities and utilities.
Will this displacement towards currency reserves beryllium capable to upwind the storm, oregon are investors overlooking different imaginable opportunities? Share your thoughts astir this taxable successful the comments conception below.
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