Fund managers haven’t been this bearish about the global economy’s outlook since November 2008, according to the latest Bank of America Lynch survey of global fund managers, an important measure of investor sentiment.
According to the survey, 44% of the fund managers expect global growth to decelerate in the next year, the worst outlook since November 2008. What’s more, 54% are anticipating a slowdown in Chinese growth in the next year, the most bearish they’ve been in over 2 years.
While fund managers’ expectations for global GDP growth is the lowest since November 2008 and China GDP the lowest since February 2016, only 11% of the fund managers surveyed are anticipating a global recession in 2019, the survey found.
All of this comes as financial markets have been hit with a bout of volatility. On Monday, the Dow shed more than 600 points.
“We remain bearish, as investor positioning does not yet signal ‘The Big Low’ in asset markets,” Michael Hartnett, chief investment strategist, wrote in the report.
The biggest tail risks according to fund managers surveyed include the trade war (35%), quantitative tightening (26%), and a China slowdown (14%).