Large investors are very downbeat on the economic outlook for the United States.
Growth expectations fell to an all-time low in May, according to the latest Bank of America fund manager survey out on Tuesday. For a dose of perspective, the current reading is below that seen during the Great Recession and the dot.com bubble.
Such dour sentiment comes despite economists expecting the U.S. economy will have grown around 2.5% in the second quarter and unemployment levels remaining near record lows.
Amid the tepid growth outlook, large investors are moving to the sidelines on stocks the survey shows.
Fund managers had the highest amount of cash in their portfolios since the September 11, 2001, terrorist attacks. Tech stocks haven't been this hated (as viewed by the number of short positions on tech stocks) dating back 2006, the survey found.
Signs of carnage on growth fears, rate hike worries and stubborn inflation can be seen throughout the stock market right now.
Just take the major sell-off in one of the hottest tech trades of the past decade: the FAANG complex, which is comprised of Facebook, Amazon, Apple, Netflix, and Google. All five components have shed more than 17% year-to-date, led by a nearly 69% crash for Netflix.
Jefferies tech analyst Brent Thill tells Yahoo Finance Live the sell-off in tech has been "unheard," and the selling pressure may not yet be over.
"While we don't have a recession in our forecast, we see the risk of a recession increasing. We now have it at about 30%. We see the risk though much larger in 2023 when those cumulative rate hikes from the Fed to attack inflation starts to weigh on mortgage payments and monthly payments for people going forward," said S&P Global Chief U.S. economist Beth Ann Bovino on Yahoo Finance Live.