Global fund managers root for fiscal stimulus, but oil prices play spoilsport

With fears of a recession gaining ground, the sentiment among global fund managers remains cautious. Bank of America Merrill Lynch’s latest survey showed that 38% of investors expect a recession over the next 12 months, the highest in a decade. The risk of a recession is now the third-biggest concern among investors. So, the clamour for fiscal stimulus is getting louder.

Those surveyed said that a fiscal stimulus was essential to boost allocation to stocks, earnings per share expectations and turbo-charge nascent rotation from growth to value stocks. “Investors think a German fiscal stimulus package, a 50-basis point cut by the Fed in September or a Chinese infrastructure package would be the most bullish for risk assets over the next six months,” according to the survey. One basis point is one hundredth of a percentage point.