Illustration: Aïda Amer/Axios

Investors were nervous about a recession before Wednesday's selloff, with a third of fund managers polled in the latest Bank of America Merrill Lynch survey saying a recession is likely to happen in the next 12 months.

Why it matters: It's the highest recession probability since October 2011. However, a large majority of surveyed fund managers, 64%, says a recession is unlikely.

What's happening: Trade war concerns (51%) were the top risk cited by fund managers surveyed, followed by "monetary policy impotence," which remained in the second spot at 15%. A China slowdown and a bond market bubble round out the top 4, each at 9%.

  • Investors are certainly trading as if a recession is coming. U.S. Treasuries (32%) remained at the most crowded trade identified by fund managers, ahead of U.S. tech (19%), growth stocks (15%) and investment grade corporate bonds (12%).
  • “Investors are the most bullish on rates since 2008 as trade war concerns send recession risk to an 8-year high,” said Michael Hartnett, chief investment strategist. “With global policy stimuli at a 2.5-year low, the onus is on the Fed, ECB and PBoC to restore animal spirits.”

Methodology: Bank of America Merrill Lynch's surveyors spoke with 224 fund managers, who are collectively in charge of $553 billion worth of assets from Aug. 2 to Aug. 8.

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Grand jury indicts former officer who shot Breonna Taylor

A memorial to Breonna Taylor in downtown Louisville, Kentucky on Sept. 23. Photo: Jeff Dean/AFP via Getty Images

A grand jury has indicted Brett Hankison, one of the Louisville police officers who entered Breonna Taylor's home in March and shot her at least eight times, on three counts of wanton endangerment.

The big picture: Taylor's death helped ignite nationwide Black Lives Matter demonstrations this summer, as protesters demanded justice for her, George Floyd and other Black Americans killed by police. The outrage led to Hankison being fired and the passage of a city law that banned no-knock warrants — two rare consequences after police shootings of Black Americans.

FDA chief vows agency will not accept political pressure on coronavirus vaccine

Food and Drug Administration Commissioner Stephen Hahn promised that "science will guide our decision" for a coronavirus vaccine at a Senate hearing on Wednesday.

Why it matters: More Americans are expressing doubt about a first-generation vaccine, despite President Trump's efforts to push an unrealistic timeline that conflicts with medical experts in his administration.

CEO confidence rises for the first time in over 2 years

Data: Business Roundtable; Chart: Naema Ahmed/Axios

A closely-watched CEO economic confidence index rose for the first time after declining for nine straight quarters, according to a survey of 150 chief executives of the biggest U.S. companies by trade group Business Roundtable.

Why it matters: The index, which still remains at a decade low, reflects corporate America's expectations for sales, hiring and spending — which plummeted amid uncertainty when the pandemic hit.

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