Money managers remain bearish as only 10% expect V-shape recovery: BofA

Trader sentiment carries on to continue to be bearish with only ten for every cent income professionals expecting a V-formed recovery, according to a study carried out by Financial institution of The usa (BoFA).

“Zeitgeist bearish: just ten for every cent hope a V-formed recovery, twenty five for every cent a new bull current market in distinction 75 for every cent hope a U or W-formed recovery, 68 for every cent a bear current market rally,” the investment decision financial institution explained.

Meanwhile, funds levels remained elevated at five.seven for every cent in contrast to ten-calendar year typical of four.seven for every cent.

In accordance to the study, the most important tail chance for the current market is a second wave of the pandemic. A total of 223 panelists controlling $650 billion in belongings had been surveyed by BofA involving May well seven and May well fourteen.

Fund professionals say a vaccine breakthrough could be catalyst for the V-formed recovery.

Virtually 3-fourth of the fund professionals think corporations should really reduce credit card debt, fifteen for every cent explained they should really maximize capex and seven for every cent explained corporations return funds to shareholders

Fund professionals are favouring fastened-profits extra with bond allocation rising to maximum degree since July 2009, the study revealed.

The most-crowded trade was US tech and development stocks. Meanwhile, fund professionals had been limited on emerging current market for initially time since September 2018 and had been file long on the health care sector.