- At GlobeLiveMedia we tell you what it means that investors have levels of pessimism similar to those of the 2008 financial crisis, something that has been reported by Bank of America, one of the most important banks in the US.
A recent report issued by financial strategists from Bank of America, one of the largest and most important banks in the United States, indicated that investors in the country are increasingly showing higher levels of pessimism about the Stock Market, due to high levels of inflation and the aggressive monetary policy carried out by the Federal Reserve (Fed). This was reported by the Fox Business news portal.
The report indicates that investors show a very high pessimistic sentiment, the worst since the global financial crisis that began in 2008. On the other hand, Bank of America strategists pointed out that investors are turning to cash as the main axis. of their investments, moving away from traditional investment products in times of inflation like gold.
This trend, that of considering cash as one of the best investment options today, had already been pointed out by institutions such as Morgan Stanley, one of the most important financial multinationals in the world, since it offers a high yield and a perspective of returns. higher than the estimates for Treasury Department bonds.
Therefore, it is not surprising that, during the week of September 21, cash has received investment inflows of up to $30.3 billion dollars, according to Fox Business, while assets such as gold or bond funds of the Treasury have lost the confidence, and resources, of investors.
Of course, fears about a possible recession due to high interest rate hikes by the Fed also play a major role in current investor sentiment.
Jerome Powell, chairman of the Fed, indicated that the chances of a “soft landing” of the economy will diminish as the monetary policy that has been applied in recent months must be tightened, which demonstrates the Fed’s commitment to reduce inflation even if it causes a slowdown in the US economy.
“We are committed to bringing inflation back to 2%, as we believe that if we fail to restore price stability, the damage could be greater,” Powell told reporters in Washington.
Meanwhile, Goldman Sachs analysts say most investment managers believe the Fed will need to raise interest rates so high that it will result in a recession sometime in 2023.
Similarly, Goldman Sachs finance specialists have warned that the S&P 500 stock index will close this year close to 3,600 points. Currently, after many declines, it is at 3,681 points, which means that the downward trend in the US financial market is likely to continue.