Recession risk highest in eight years

One out of every three fund (34%) managers surveyed by Bank of America-Merrill Lynch (BofAML) feels that a recession is possible in the coming 12 months. This is the highest possibility of recession recorded since October 2011. The survey covered 224 panelists with US$ 553 billion of assets under management (AUM) between August 2 and August 8. This is the highest possibility of recession recorded since October 2011. 

Around half of the fund managers surveyed also opined that corporates are suffering from excessive leverage and should look at ways to clean up their balance sheets. Concerns on the trade war rose by 15 percentage points as 51% of the fund managers identified it as the top ‘tail risk’. Also, a net 15% of investors would prefer to be overweight on the US.