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Key Takeaways From BofA Fund Manager Survey

GLOBAL
  • Sentiment remains bearish (cash at 5.7%), too bearish for an immediate reversal of bear rally
  • BofA Bull & Bear Indicator stays at "max bearish" and as such would fade SPX >4328 as rates up-profits down remain the base case
  • Recession is as consensus as it was in Mar'09 & Apr'20 and '09 so 88% of investors expect lower inflation next 12 months
  • Fear of rate hikes is subsiding (Fed Funds hikes of 100-125bps forecast)
  • Survey shows biggest tail risk is inflation staying high, while the catalyst for a Fed pivot is seen as US PCE inflation below 4%

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