THE SMART MONEY NOW POSITIONED FOR LATE 2020 RECESSION & SECULAR STAGNATION

  • Wall Street's professional investors are preparing for the worst, with two-thirds once again falling into the "secular stagnation" camp ahead of what is now a consensus call for a recession in the second half of 2020.
  • According to the latest monthly Fund Manager Survey conducted by Bank of America which polled 239 investing professionals with an AUM of $664 billion in the April 5-11 period, investors are now positioned for "secular stagnation" - even as they dipped their toe into risky assets - "They are long assets that outperform when growth and rates fall, like cash, EM and utilities, while short assets that require higher growth and rates, such as equities, the Eurozone and banks"

No recession: 70% of investors surveyed expect a global recession to start in the second half of 2020 or later...

... yet somewhat paradoxically, a whopping 86% believe yield curve inversion does not signal an impending recession, which begs the question: if everyone is discounting the yield curve as a signaling mechanism, why is everyone so convinced that a recession is coming... and tied to that, why is everyone so certain that a yield curve inversion does not indicate a recession?

No growth... and yes to secular stagnation: 66% expect "low growth, low inflation" backdrop, the highest level since Oct'16; allocation to global bank stocks falls to lowest level since Sep'16.

 

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MATASII RESEARCH ANALYSIS & SYNTHESIS WAS SOURCED FROM:

SOURCE:  04-17-19 - - "Two-Thirds Of Wall Street Investors Positioned For "Secular Stagnation", See Late 2020 Recession"

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