Global growth optimism has hit an all-time low

According to a monthly study conducted by investment firm BoFA Securities, fund managers’ confidence in global economic growth has reached a new low. The decline comes amid fears of stagflation, which has reached its highest level since August 2008.

According to the research, a net 71 percent of respondents polled were gloomy about global economic prospects in the next months, which was issued on Tuesday. This is the highest number since the study began in the early 1990s.

According to the European edition of the BoFA study, 81 percent of respondents anticipate the region’s economy to worsen over the next year, up from 69 percent in March.

Global growth and recession

According to the data, fund manager cash holdings – generally a sign of investor concern – fell to 5.5 percent in April from 5.9 percent the previous month. However, the threat of a worldwide recession remains the most significant “tail risk” for global markets.

Commodity allocations reached a new high of 38%, with investments in oil and commodities being the most “packed trade.”

Other “long” bets included resource stocks and healthcare, while “short” bets included bonds and cyclical companies, whose performance is most strongly tied to economic growth, according to BoFA.

According to the study, worldwide profit forecasts have fallen to their lowest level since March 2020.

Despite mounting recession fears, a majority of poll respondents anticipate European shares to reach new highs in the next economic cycle, with less than 30% forecasting market decline.

According to the European edition of the study, the UK remains Europe’s favourite equities market, while Germany and Italy are the least favoured.

The survey took place between April 1 and April 7.