A Bloomberg News story published this morning highlights the most recent results from Merrill Lynch's monthly survey of money managers. Some of the highlights of the report show that over half of respondents (51%) are more risk averse than normal. As a result, cash levels are at their highest since the 9/11 terrorist attacks, and managers are underweight equities for the first time since March 2003.
Regarding the economy, things don't look much better. Forty-four percent of respondents think the US economy is either in a recession (16%) or will see one within the next twelve months (28%). And before you burn those bell-bottoms and your old Bee-Gees 8-tracks, 67% believe we will see a stagflationary environment going forward. As the keeper of the survey summed it up, "The numbers in this month's survey are absolutely depressing."
(Earlier today, we put out a B.I.G. Tips report for Bespoke Premium subscribers highlighting what this negativity means for the market.)