FAST FIVE: Two-Thirds Of Wall Street Investors Positioned For "Secular Stagnation", See Late 2020 Recession
while just 13% expect higher short-term global rates – the lowest level since August 2012.
and yes to secular stagnation: 66% expect “low growth, low inflation” backdrop, the highest level since Oct'16; allocation to global bank stocks falls to lowest level since Sep'16.
What is behind this seemingly conflicting posture of expecting even more economic pain coupled with allocating more assets to stocks (besides hope for rate cuts and/or QE4 at some point).
cash, and BofA's “Bull & Bear Indicator” is still neutral at 4.6; however other proprietary FMS rules are long risk assets and predict 2.75% on 10-year Treasuries.
More importantly, with positioning set to be whipsawed as investors rotate out of defensive sectors and into cyclicals, the question is whether VIX, which earlier today dropped below 12, sliding to the lowest level since last August, will finally rebound, or whether it will keep shrinking and, in a repeat of 2017, slump into the single digits as central banks reassure investors that there are no risks left.