The consensus has shifted from apocalyptically bearish to reluctantly bullish.
– Michael Hartnett, Co-Head, International Investment Strategy, Banc of America-Merrill Lynch
This morning, Merrill Lynch released their monthly survey of fund managers which took place between April 2 and April 8. Here are some highlights:
- Optimism about global growth reached its highest level since early 2004 with a net 26% of respondents believing the global economy will strengthen in the next 12 months, up sharply from -24% in January.
- Just 17% of respondents are underweighting equities compared to 41% in March.
- A net 26% of respondents believe the Chinese economy will strengthen over the next 12 months. As recently as November, 85% expected it to decline.
- As a result, 26% of respondents are overweight emerging markets compared to just 4% in March.
- Along the same lines, a net 4% of respondents are overweight commodities – the first positive reading since last August.
- Technology has become popular, with 27% of respondents overweight the sector.
My, my how things have changed. Things looked diametrically opposite to fund managers six months ago.