A March survey of fund managers by Bank of America Merrill Lynch reveals that many think money printing by central banks is coming to an end — and, for the first time since last July, that global profits are likely to improve.
“The conclusions you reach from it is that fund managers said that QE has worked; that central bank policy is working; that the fight against inflation is working to the extent that they don’t think it is needed any more,” Gary Baker, Head of European Equity Strategy at BofA Merrill Lynch Global Research, told CNBC.
“There are two stories: There is technology over in the far corner somewhere. And people could not be more in love with technology,” Baker said.
“The biggest change on the month is definitely in financials. That is a story that played through in Europe over the last few months and now the U.S. has caught up in that process.”
Twenty-eight percent of fund managers surveyed said they expect the global economy to strengthen in the next 12 months, up from 11 percent in February.
Nine percent of respondents said China’s economy will weaken in the next year, up from a net 2 percent in February.
“There is more of a general concern about inflation. It is very in keeping with their (Asian fund managers) views on growth,” Baker says.
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