BofA-ML Survey

Survey shows while inflation is seen falling, mood is stagflationary; recession expectations highest since May 2020; global growth and profits at all-time lows, cash levels highest since 9/11 attacks

The share of investors buying protection against a correction in equity markets has seen the largest monthly increase in 14 months, says a survey of Bank of America Merrill Lynch (BAML) survey of global fund managers. In September, there was a nine percentage points (ppt) increase in equity hedging and only a net 24 per cent of those polled haven't bought protection against a fall in the equity markets. The optimism over global growth has continued to decline, with just 25 per cent of investors expecting a stronger economy in the next 12 months, as compared to 62 per cent at the beginning of the year, the BAML survey revealed. The BAML polled over 200 money managers handling $630 billion in assets during early September.A key finding of the survey was the cash levels at funds remain above historical levels, which could insult the market from a sharp fall."Average cash balance continues to be a key element preventing a sell signal, dipping to 4.8 per cent in September but still above .