Trump tariffs sink global economy outlook
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Global fund managers have turned startlingly pessimistic when it comes to the chances that the world will be able to withstand the effect of across-the-board U.S. tariffs — and they're particularly bearish when it comes to the U.S. itself.
Why it matters: The most recent Fund Manager Survey from Bank of America underscores the thesis that global investors are selling America.
By the numbers: The most recent survey, which was conducted between April 4 and April 10, included 164 global fund managers who collectively have $386 billion of assets under management.
- 49% of them said that a hard landing is now the most likely outcome for the global economy, up from 6% in February and 11% in March.
- The percentage of investors intending to cut their allocation to U.S. equities rose to the highest level since the survey began in 2001.
- Bank of America's fund manager sentiment index is now lower than it was even at the depths of the pandemic crash in 2020.
Zoom out: 82% of respondents said the global economy is set to weaken — that's a 30-year high.
- For the first time in over two years, the most crowded trade is no longer being long the "Magnificent 7" tech stocks. Instead, it's being long gold.
The bottom line: Institutional investors have very little risk tolerance right now. In practice, that means they're unlikely to get enthusiastic about companies making big investments — in the U.S. or anywhere else.
