by Tyler Durden
Moments ago, in the aftermath of Mario Draghi’s “shocking” admission that things are back to square (minus?) one and more easing will be needed, another ECB member said something that was even more striking:
PRAET: MARKETS DON’T SAY ACT NOW, THEY WANT TO BE REASSURED
Wait, the S&P is 1% below all time highs and the markets “want to be reassured?”
That may explain why as Bank of America reported earlier today, the bank’s latest Fund Manager Survey which polled 230 panelists with $645BN in AUM between June 7 and 13, found that investor confidence is now the most bearish since 2008’s Global Financial Crisis due to “concerns over trade war/recession, monetary policy impotence, and low strike prices for policy puts”, those of Powell and Trump.
As BofA finds, the asset allocation of fund managers, implies recessionary conditions with the 2nd biggest ever sequential drop in equity allocation of those polled – down 32% to net 21% underweight, the lowest allocation to equities since March 2009 and second biggest one-month drop on record.
At the same time, Average cash balance soars to 5.6% from 4.6% for each of the last three months, marking the biggest jump in cash since the debt ceiling crisis in 2011; allocation to cash jumps 10ppt from last month to net 43% overweight