A net 49% of respondents say that for the first time since February the global economy is in an early-cycle phase compared with 37% who believe it’s still in recession. Eighty-four percent of those surveyed believe global growth will increase over the next 12 months.
The measure is a “key recovery milestone” in both the 2009 and 2012 recoveries, according to Michael Hartnett, chief investment strategist at Bank of America.
The Charlotte, N.C.-based lender surveyed 199 participants with $601 billion in assets under management between Sept. 3 and Sept. 10.
As money managers have grown more optimistic on the global economy, their view on the shape of the recovery has changed.
A net 20% of respondents see a V-shaped recovery, up from 17% last month. At the same time, 61% of investors believe the recovery has taken the form of a U or W shape, down from 68%.
The increased optimism has corresponded with a net 58% of those surveyed now saying stocks are in a bull market, an 8 percentage point increase from the prior month. Just 29% believe stocks are seeing a bear market rally.
A second wave of COVID-19 infections remains the biggest “tail risk” for 30% of managers, followed by a bubble in technology stocks, the U.S. election and a credit event. A record 80% of respondents say U.S. tech stocks are the “most crowded” trade.
Election risk remains a concern with 80% of respondents believing the U.S. Senate flipping from Republican control to Democrat control would be a “risk off” event.