FT: Global Fund Managers Prepare For The Winter And Fall Into Silence

FT said that according to a monthly investor survey released by Bank of America Merrill Lynch, fund managers are selling stocks and commodities to prepare for the global recession.

This latest indication that investors are worried about the economic outlook appears at a time when investors weigh the impact of the US economic recovery and the slowdown in China and its supply of raw materials.

According to the survey by the Bank of America and Merrill Lynch, global economic growth expectations and share of stocks in the portfolio are at a 3 year low.

This year's movement of funds favors government bonds and eurozone stocks, while U.S. stocks and emerging market assets have been sold.

Only 1/4 of respondents expect the Federal Reserve to raise interest rates this week, up from nearly half in August.

However, respondents still believe that the Fed's first interest rate increase is near, and more than 3/4 of respondents predict that the Federal Reserve will raise interest rates by the end of this year.

Before the report came out, Citigroup said on Monday that China has caused the global economy to fall into recession in 2016 and has become the most likely scenario.

Citigroup economist wrote: "the possibility of making timely and effective policy responses seems to be decreasing."

A survey released by Merrill Lynch on Tuesday described a "clear pessimism" in the market in early September. 1/3 of respondents said that the stock market looked most vulnerable to the US tightening monetary policy.

The US economy continues to recover, and the unemployment rate has dropped to its lowest level since April 2008. This means that the US Federal Reserve (Fed) may raise interest rates this week, the first time in 9 years.

However,

It seems more worried that monetary policy tightening is premature.

In the meantime, the global economic situation is still uncertain and inflation is at a low level.

According to the survey by Merrill Lynch, investors have been avoiding commodities for a long time, and regard China's recession as the biggest "tail risk", that is, they believe that China's recession is possible and destructive, but the probability of occurrence is not great.

This monthly survey identified the views of 214 investors who managed a total of $593 billion assets.

Leverage has dropped to its lowest level since June 2012.

"Investor sentiment is extremely low," says Trevor Greetham, head of Royal London multi asset management. "Trevor,"

He said that in the past week, the comprehensive indicators of Royal London tracking 4 sentiment indicators have dropped to the level seen during the last European debt crisis and during the 2008 financial crisis.

The bull market in the US stock market has entered its seventh year, but according to the current trend, the S&P 500 will continue to fall this year. In the turbulent market in August, the index fell by 9%.