Investor confidence is unraveling at a pace not seen in years, with recession odds climbing, U.S. equity allocations collapsing and cash piles swelling, signaling one of the most bearish market outlooks in a quarter-century.
In a note shared Tuesday, Bank of America’s Michael Hartnett said April’s Global Fund Manager Survey (FMS) revealed the fifth most bearish sentiment recorded in 25 years.
With global growth expectations at 30-year lows and fears of a trade war-induced recession surging, the market narrative has flipped sharply from optimism to caution.
“The current level of sentiment is the 5th lowest on record (behind 2001, 2009, 2019 and 2022),” Hartnett wrote.
A Crash In Investor Confidence
The survey, which gathers responses from hundreds of global fund managers overseeing trillions in assets, shows net 82% of respondents expect the global economy to weaken over the next 12 months—the highest level since the survey began. This marks a dramatic deterioration from March, when only 44% held a negative growth outlook.
Recession fears are also spiking, with 42% predicting a global recession, up from 19% in March.
The probability of a “hard landing”—where economic contraction is abrupt and damaging—jumped to 49%, more than four times the 11% reported just a month earlier.
Cash …