Global Fund Manager Survey
Investors not yet Max Bearish......just 12% believe a global recession will occur in the next 12-months, investors remain OW equities & UW bonds, and stubbornly long tech, Eurozone & Japanese stocks (assets now most vulnerable to a redemption/recession shakedown).
But cash levels surging higher...
...investors raise cash (to 5.4% = 3rd highest since 2009), cut growth & profit expectations (EPS expectations turn negative for 1st time since Oct’12), and rotate defensively (selling stocks, resources, industrials, banks & EM, and rotating to healthcare, staples, cash & bonds).
And long US dollar starts to unwind...
...US$ strength induces record UW in materials, 1st industrials UW in 40 months, and China recession/EM debt crisis remain biggest "tail risks"...but number of US dollar bullsdrops to 3-year lows as Fed rate hike expectations start to fade (2 hikes forecast in 2016, down from 3).
Investors no longer in "denial" about recession/bear market risks...
...but yet to accept macro/markets already well into a normal, cyclical recession/bear market. True capitulation would involve a bout of US$ weakness and outperformance of FMS "shorts" (e.g. BRIC) as redemptions induce forced-selling of "longs" (e.g. FANG). Sell bounces until the 4Cs (China, Commodities, Consumer, Credit) improve.
European Fund Manager Survey :
No conviction? Hide in Europe
Global expectations drop but investors still bullish on Europe