According to a quarterly survey by Citigroup, nearly 70% of asset managers expect a 20% correction more likely than a 20% increase in stocks.
Since the last poll in March, managers have changed their minds about who will win the White House. Former Vice President Joe Biden is expected to win, 62% expect this, a sharp change since December, when 70% expected President Donald Trump to win. Opinions about who will win were equally divided in March.
140 fund managers surveyed by Citi say they hold more of their portfolios in cash, despite the stock market recovery. Average cash reserves are 10%, have not changed compared to March, but are twice as high as last June and double the historical average.
The purchasing side managers also had a weighted average target for the S & P 500, which remained virtually unchanged at current levels, at 3027 at the end of the year, but a third expects the index to close above 3200.
Less – 63% – want to bring new funds to the market, compared with 80% in March. Technology, healthcare and communications were favorite sectors of the market, while the “least favorite” were energy, REIT, and finance, according to Citi. They also expect dividend payers to be worse.
Managers also sharply changed their views on the forecast for the dollar. About 60% now expect to see a weaker dollar, twice as much as in March.
A quarterly survey of managers of mutual funds, hedge funds and pension funds also showed that 75% believe that the consensus forecast for profit in 2021 in the amount of $ 164 is too high. The average profit forecast for 2021 was below 9%, but more than 30% of respondents said that profits could grow by 10-20%.
About 57% expect unemployment from 7.5% to 10% by December, and 30% expect the level to remain above 10%.