Investors continue to be bearish on Covid’s second wave fears: Survey – The Financial Express

by admin on June 16, 2020

The survey stated that Wall Street was past ‘peak pessimism’ but June optimism was fragile, neurotic and nowhere near dangerously bullish and that the largest number of FMS investors since 1998 thought the stock market was ‘overvalued.’The survey stated that Wall Street was past ‘peak pessimism’ but June optimism was fragile, neurotic and nowhere near dangerously bullish and that the largest number of FMS investors since 1998 thought the stock market was ‘overvalued.’The survey stated that Wall Street was past ‘peak pessimism’ but June optimism was fragile, neurotic and nowhere near dangerously bullish and that the largest number of FMS investors since 1998 thought the stock market was ‘overvalued.’The survey stated that Wall Street was past ‘peak pessimism’ but June optimism was fragile, neurotic and nowhere near dangerously bullish and that the largest number of FMS investors since 1998 thought the stock market was ‘overvalued.’

A fund manager’s survey done by Bank of America (BofA) Global Research in June shows that investors continue to be bearish. The biggest tail risk for the markets is the second wave of Covid-19. In the survey, 53% of the participants were of the view that the ongoing rally was a bear market rally as opposed to 37% who were of the view that it was a bull market.

The extent of fund managers who believed that the markets were still going through a bear market rally had, however, reduced to 53% in June against 68% in May. The survey stated that Wall Street was past ‘peak pessimism’ but June optimism was fragile, neurotic and nowhere near dangerously bullish and that the largest number of FMS investors since 1998 thought the stock market was ‘overvalued.’

Additionally, most participants continued to believe that the second wave of Covid-19 was still the biggest tail risk for the market and in the post Covid-19 pandemic world the biggest structural change would be supply chain reshoring with 68% of the fund managers agreeing to it. This was followed by protectionism and higher taxation at 48% and 43%, respectively.

The fund managers were expecting a ‘U’ or ‘W’ shaped recovery with 64% agreeing to it against the 18% who expect a ‘V-shaped’ recovery, the FMS showed. The overall cash levels of the participants in the FMS stood at 4.7% down from 5.7% which is the biggest drop since August 2009 led by institutional investors and not retail investors, the foreign financial services firm said.

FMS bull trade was to go short bonds, long European Union and small cap stocks whereas the contrarian bear would go long on emerging markets and resources.

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