Uncertainty about the possible default of the U.S. government forces investors to make attempts to save capital. And the sentiments of private investors and funds are divided on this issue.
While at the beginning of May 83% of investors did not believe in the reality of a default, today their number has decreased to 71%. That is, 29%, which is almost a third, are beginning to believe that default is imminent.
What do ordinary people do? They withdraw all their assets in cash dollars, not trusting any other assets.
Market professionals have a different opinion.
Bank of America (BOFA) researchers surveyed more than 250 global fund managers controlling more than $650 billion in assets. According to the survey, sentiment is worsening and taking a Bearish direction, amid growing fears of a possible recession and credit crisis.
Funds are buying long-dated assets as defensive assets
Bigtech stocks (32%),
as well as shorting all bank stocks (22%) and the U.S. dollar (16%). Moreover, interest in commodity markets and utility companies has dropped to almost zero.
Approximately 65% of global fund managers surveyed believe in the impending economic downturn for the markets.
The survey notes that investors are gripped by fears about the prospects of a global recession and the potential for a significant increase in interest rates by the U.S. Federal Reserve as a means of suppressing persistent inflationary pressures.
Fund managers have also expressed concern about escalating tensions between major countries and the risk of a chain bankruptcy of the banking credit system.
As a result, people are entering the dollar with no prospects for other assets. And funds only believe in BigTech. Interest in treasuries tends to zero.
Of course, we need to discount the fact that the survey was conducted by a major bank, not an independent analytical company. Therefore, gold, cryptocurrencies, real estate and other alternative assets did not appear in the survey at all.
But it is surprising that in anticipation of a recession and default, funds have completely lost interest in industry, pharma, oil, raw materials and electricity.
From their perspective, this sector of the market will stagnate. People won't heat their homes, drive their cars, get medical treatment and eat, everyone will be in VR helmets watching CNBC news, getting rid of everything by going out to the cash dollar.
Such a picture is very reminiscent of the WEF plans. I have nothing and I'm happy. All that's left to do is recycle the trillions of cash dollars that naive citizens have set aside for hard times.