Chart Beat: Global fund managers are increasingly betting on soft landing

Investor confidence is on the rise, buoyed by expectations of interest rate cuts by the US Federal Reserve in 2024, which has eased concerns about a severe global economic downturn. The latest survey by BofA Securities reveals a significant shift in sentiment: 79% of investors now foresee either a 'soft' or 'no' landing for the global economy in 2024, marking a nine month peak in optimism.

A 'soft landing' implies a deceleration from growth to slower growth or stagnation, steering clear of recession. In contrast, only 17% anticipate a 'hard landing', characterized by a marked economic slowdown, registering a nine month low in such expectations, said the January survey report.

The outlook for global growth is also looking up, with 41% of survey respondents not expecting any recession in 2024. Additionally, there's a notable uptick in profit expectations, reaching a two year high. The survey found that a net 21% of Fund Manager Survey investors expect a rise in global profits over the next 12 months, the most optimistic stance since February 2022.

This shift in investor mood aligns with the recent uptrend in global equities, underscoring a more positive economic outlook..