In what could spell trouble for equity market, corporate earnings outlook has shown sharp deterioration, says a survey of fund managers conducted by Bank of America Merrill Lynch (BAML).
The survey for the month of August found that only a third of investors think corporate profit will improve over the next 12 months. The reading is lowest since November 2015 and down eight percentage points since last month and 25 percentage points from January.
“Investors’ expectations of corporate profits have taken an ominous turn this year, which is a warning sign for equities over bonds, high yield over investment grade,