A BOfA fund manager survey showed that investors are bearish on stocks, especially riskier assets, and expect a slower economic recovery as the risk of a second wave of infections from the novel coronavirus persists.
The World stocks have bounced back by a whopping 31% in less than two months from a March selloff, recovering more than half their losses, as investors bet that economic activity would rebound rapidly once lockdowns were eased.
But evidence of fresh coronavirus infections in some countries has dampened those hopes. BofA’s survey showed that a pandemic “second wave” was seen as the biggest risk to markets for the second straight month.
As economic forecasts continue to deteriorate, May’s poll showed 75% of respondents believe the recovery will be U or W-shaped. Only 10% of the 194 respondents in the survey were expecting a V-shaped recovery.