As fears of a recession remain high, professional stock pickers They are reportedly shifting money away from economically sensitive stocks like banks and parking it in stocks that are considered resilient in economic downturns, such as Brazil. B. Utilities and Consumer Staples.

What happened: Bank of America strategists led by Savita Subramanian wrote in a note that active stockpickers are “positioned for a 2009-style recession.”

Hedge funds holding both bullish and bearish positions have reduced their cyclical holdings relative to defensive stocks to the lowest levels since at least 2012. reported Bloomberg citing data compiled by BofA.

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Long-only managers’ relative exposure to cyclical companies is now near its lowest level since 2008, the report added.

US markets ended lower on Monday as market participants weighed the news from JPMorgan Chase & Co JPM take over Bank of the First Republic FRC and showed caution before that Those of the Federal Reserve rate decision this week. The SPDR S&P 500 ETF Trust SPY 0.1% closed lower while the Invesco QQQ Trust Series 1 QQQ lost 0.11% on Monday.

Bonds vs Stocks: In BofA’s latest survey of wealth managers in April, cash holdings remained high and bonds were favored over equities more than at any time since 2009.

The recent bias toward defensive stocks is a departure from the trend in 2022, when fears of a recession mounted and active funds stuck to a cyclical stance, the report said. This attitude showed confidence in the Those of the Federal Reserve Ability to achieve a soft landing with its aggressive anti-inflationary policies. However, such trust has been difficult to find recently, the report said.

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