(CercleFinance.com) – The repercussions of the upward trend in interest rates on banks and the economy as a whole increases the risk of a future recession in Europe, according to a study by Bank of America.
BofA’s monthly survey of European fund managers shows that 53% of investors now expect the European economy to weaken over the coming year, down from just 33% last month.
Among them, 61% say they anticipate a recession on the Old Continent over the next 12 months, compared with a figure of 55% in February.
The likelihood of a global recession is also skyrocketing, adds BofA, with 42% of managers anticipating such a scenario compared to 24% the previous month.
Of the managers surveyed, 66% now say they see downside potential for European equities in the next few months, compared to 53% in February.
Investors, however, remain more optimistic in the medium term, with 55% predicting upside potential over a one-year horizon, unchanged month-on-month.
Banking stocks, which until now were the favorites of managers, are suffering the repercussions of the recent crisis of confidence that hit the financial sector, since only 3% of managers are now overweighting them, compared to 27% last month.
Technology stocks, on the other hand, are benefiting from a return to favor, a first since the end of 2021, since 34% of managers are now overweighting them, compared to 10% last month.
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