Investors’ views on global growth and profits are “not so optimistic”
Investors said that the economic reopening of the global growth boost has passed its peak, although they have played down the risk of the Delta coronavirus variant disrupting the recovery.
According to 239 fund managers surveyed by Bank of America in a monthly survey, the coronavirus ranks fifth among the risks to the global economy, and these fund managers manage a total of $742 billion in client funds.
The July survey found that investors’ views on global economic growth and corporate profits are “less optimistic”. The proportion of investors who believe that the economy will continue to improve has fallen sharply from a peak of 91% in March to 47% this month.
Bank of America stated that the survey results “indicated a’peak boom’ because of expectations of above-trend growth and above-trend inflation” also began to decline.
Investors’ prospects for growth and profits are bleaker than at any time since November last year, when the arrival of the coronavirus vaccine and the victory of the Democratic Party in the U.S. election were based on the promise of a historic stimulus plan. Investors believe that the surge in economic growth is imminent.
However, fund managers said that despite the recent increase in coronavirus cases, they still believe there is still room for a recovery in Europe. Bank of America said that Europe is still the most favored region for global investors, and continental European managers “are obviously more optimistic about Europe than the global outlook.”
The risk of inflation and the withdrawal of support from the central bank leading to a disorderly “tantrum” in the market is still the top concern of fund managers, followed by asset bubbles and the possible slowdown of the Chinese economy.
Joseph Little, chief global strategist at HSBC Asset Management, said: “The economic situation in the first half of 2021 has been recovering. The introduction of vaccines, policy support and increased confidence have helped push up bond yields and stock prices. “
“with the development of economy [from recovery] Entering the expansion period, investors need to prepare for the upcoming cyclical changes, lower return on investment phases and changes in policies and systems,” he added.
Despite concerns about inflation risks, 70% of fund managers still believe that the rise in inflation will be temporary. An equal share is expected that the Fed will signal a reduction in monetary policy support for the economy through asset purchases at the end of the summer, and investors will postpone the possible date of the Fed’s first interest rate hike to January 2023.
However, investors have expressed concerns about inflation in different asset positions, and there is little sign that deflationary trading is about to end. Bonds whose fixed interest payments have been eroded by high inflation are still unpopular, while funds hold more commodities and stocks, which soared as the economy reopened.
For the first time since April, technology stocks have been rated as the “most crowded transaction”, ranking first in Bitcoin and commodities in recent surveys.