Sumary of Pandemic has widened the chasm between markets and economy:
- It’s becoming clear global equity markets and economic growth are the two divergent forks in this ‘K’.
- Sure, the stock market and economic growth hardly moved in tandem even in the pre-pandemic era, but the wedge has widened in a counter-intuitive move.
- The latest global fund managers’ survey highlighted that this K is very much dominant in investment decisions.
- According to the Bank of America Merrill Lynch’s September survey, global fund managers have turned bearish on the global economy.
- Expectations of global economic growth are now at a net 13%, the lowest since April 2020. Also, this is a significant decline from a 91% peak in March this year.
- The survey report said that the delta variant of the virus was behind this pessimism.
- View Full ImageMind the gap In sharp contrast, the broader equity market positioning remained firmly bullish among fund managers.
- The net global equity allocations stood at 50%, which is much above a 20-year average of 29%, said the BofA survey.