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- The global recession is now the biggest fear of credit investors, according to a Bank of America Merrill Lynch poll.
- 30% of respondents suggested that recession was their main concern, the highest level since June 2017 for a single concern.
- Surprisingly, investors are not worried about rising yields or inflationary pressures, with Brexit accounting for just 2% of respondents.
According to a Bank of America Merrill Lynch survey, high-risk and high-yield investors are worried about their growth.
Corporate bond markets plummeted at the end of 2018 as volumes plunged under market stress as a result of the US-China trade war and slowing global growth. These fears seem to be clearly manifested in the minds of the 58 BAML clients surveyed, with the global recession now being the most important concern of investors.
30% of respondents said their biggest fear was a global recession, with the highest proportion of survey respondents citing a single problem since the summer of 2017.
The bad numbers outside Europe, particularly in Italy and Germany, as well as concerns about China have played in the minds of investors in recent months. The largest economy in Europe, Germany, has just avoided a technical recession in 2018 as the manufacturing sector, especially the automotive, experiencing difficulties.
Investors are also concerned about US GDP figures to be released shortly for the fourth quarter, which are expected to be lower than the peak of growth in the second quarter of 2018. The global slowdown is a serious one. problem for the United States. vulnerable to the turmoil of other economies.
"The tight economic and financial ties today have probably increased the risk of foreign spillovers," wrote Goldman Sachs economists led by Jan Hatzius in a recent note.
For 40% of those surveyed, the revival of China is one of the keys to getting Europe out of its current malaise. China's debt problems are well known, but an improvement in the country's import data, with a particular reference to German cars, could for instance help the troubled eurozone.
Investors are clearly tired by the endless debate over Brexit, with only 2% considering it a major concern, while the apparent slowdown in the Fed's upside program has completely reversed concern over rising interest rate.
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