Investors Seek Refuge in Cash as Recession Fears Mount, BOFA Survey Reveals – Economics Bitcoin News

Investors, tormented by mounting pessimism, have sought refuge in money, in keeping with a current survey carried out by Financial institution of America. The survey highlights a notable 5.6% enhance in money reserves throughout Might, as apprehensive buyers brace themselves for a possible credit score crunch and a recession.

Flight to Security: Investors Improve Cash Reserves and Brace for Recession

Investors are more and more gravitating in direction of money reserves, as indicated by a recent survey carried out by BOFA, which characterizes this motion as a “flight to safety” within the realm of monetary transactions. Notably, inventory publicity has attained its peak up to now in 2023, whereas BOFA additional highlights that bond allocations have reached their highest stage since 2009.

Between Might 5-11, BOFA’s researchers carried out the survey by participating with over 250 world fund managers overseeing over $650 billion in property. In line with the BOFA ballot, sentiment is souring and taking a bearish flip, with considerations looming over a attainable recession and credit score disaster.

BofA’s Fund Supervisor Survey’s most “crowded trades”

lengthy large tech (32%)
quick banks (22%)
quick US greenback (16%) pic.twitter.com/wQ1PNl5Q5U

— Jonathan Ferro (@FerroTV) May 16, 2023

Roughly 65% of the worldwide fund managers surveyed expressed a perception within the chance of an financial downturn. In terms of the U.S. debt ceiling, a major majority of the buyers polled anticipate its enhance by a particular date. Nevertheless, regardless that most fund managers anticipate a decision, the share of buyers holding such expectations has declined from 80% to 71%.

The survey notes buyers are gripped by apprehension over the prospects of a world recession and the potential for an enormous rate of interest hike by the U.S. Federal Reserve as a method to quell persistent inflationary pressures.

Fund managers additionally harbor considerations concerning escalating tensions amongst main nations and the chance of a contagion within the banking credit score system. As well as, BOFA’s analysis revealed essentially the most closely populated shares, with lengthy tech trades claiming the highest spot on the record.

Among the many different crowded trades had been bets towards the U.S. greenback and U.S. banks, whereas a considerable inflow into tech shares was witnessed, diverting consideration from commodities and utilities.

Will this shift in direction of money reserves be sufficient to climate the storm, or are buyers overlooking different potential alternatives? Share your ideas about this topic within the feedback part beneath.

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