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Illustration: Eniola Odetunde/Axios

An overwhelming majority of the world's asset managers think stocks are overvalued and expect a recession this year or in 2021, according to a survey released Wednesday by the Boston Consulting Group.

  • Many say "the current bull market is running on borrowed time."

Why it matters: The survey of more than 250 asset managers and analysts who oversee $300 billion at firms that collectively manage over $10 trillion shows the continued apprehension of investors from around the globe.

  • "The survey, conducted in November and December 2019, found that, on average, respondents’ outlook is similar to what it was just before the market correction in late 2018."
  • Even with stocks racing higher into the end of 2019, market sentiment was "nearly identical to what we found in our 2018 survey when we saw a clear shift in sentiment from bullish to bearish."
Expand chart
Data: BCG 2014-2019 investor surveys; Chart: Danielle Alberti/Axios

Background: The S&P 500 has gone the longest amount of time in history without a 20% decline, or bear market, and that has a lot of money managers anxious — expecting that the good times cannot last forever.

  • BCG's survey also finds that worries about geopolitical uncertainty are adding to these fears as are the political environment and the upcoming U.S. presidential election.

Details: The stock market's historically high price-to-earnings ratio is the top concern, investors say.

  • 73% of respondents say they see markets as currently overvalued, up from 67% in the 2018 survey.
  • Among self-described market bears in the 2019 survey, 78% cited market overvaluation as the reason for their pessimism, versus 64% in the 2018 survey.

One level deeper: Fear that U.S. equities are headed for consistently weaker performance is gaining steam, with investors' expectations for total return falling to a record low of 5.6% — well below the average 10.1% annual total stock return of the S&P 500 since 1926.

  • Despite the S&P far outpacing these levels in three of the last four years, the expected return of 5.6% "roughly matches the expectation level reported in our previous three surveys," BCG analysts say in the report.

Yes, but: "Although many investors believe that the current bull market is running on borrowed time, few anticipate a major market crash or deep recession," the survey notes.

  • The 71% of respondents expecting a recession in the next two years is down from 74% in the 2018 survey.

Go deeper:

Go deeper

Australia opposes UN report warning Great Barrier Reef is "in danger"

A green sea turtle swimming among the corals at Lady Elliot island, off the coast of Queensland, Australia. Photo: Jonas Gratzer/LightRocket via Getty Images

The Great Barrier Reef should be included in a list of World Heritage Sites that are "in danger" from climate change, a United Nations committee said in a report Tuesday.

Yes, but: Australia's government said it will "strongly oppose" the recommendation by UNESCO's World Heritage Committee.

Sen. Kyrsten Sinema: Abolishing filibuster would weaken "democracy's guardrails"

Sen. Kyrsten Sinema at the U.S. Capitol building earlier this month. Photo: Samuel Corum/Getty Images

Sen. Kyrsten Sinema (D-Ariz.) defended her opposition to abolishing the 60-vote legislative filibuster in a Washington Post op-ed published Monday night, saying to do so would weaken "democracy's guardrails."

Why it matters: There have been growing calls from Democrats, particularly progressives, to overhaul the rules as the Senate prepares to vote Tuesday on a massive voting rights package. But Sinema writes in her op-ed that if this were to happen "we will lose much more than we gain."

Court blocks California assault weapons ban repeal

Photo: Patrick T. Fallon/AFP via Getty Images

A federal appeals court on Monday blocked a judge's ruling that overturned California's 30-year assault weapons ban.

Driving the news: U.S. District Judge Roger Benitez ruled earlier this month that the ban was unconstitutional and likened the AR-15 to a Swiss Army knife, but the U.S. 9th Circuit Court of Appeals has now granted a stay, pending appeal.