Investor survey shows most bearishness in 11 months. So the contrarian call is to buy
Investor pessimism has surged to the highest level in nearly a year, a development that could paradoxically signal further gains for risk assets, according to the latest Global Fund Manager Survey from Bank of America. Sentiment fell to its most bearish reading since June 2025, with the bank’s composite measure — based on cash levels, equity allocations and global growth expectations — dropping sharply to 3.7 in April from 5.6 the prior month, according to Chief Investment Strategist Michael Hartnett. Expectations for global growth saw their steepest decline since March 2022, while inflation expectations climbed to the highest since May 2021, the survey found. The poll, conducted from April 2 to April 9, captured responses from 193 investors overseeing $563 billion in assets under management. Most of the survey period took place before the recent ceasefire headlines and ensuing market bounce, suggesting the findings may already be somewhat stale. Such extreme pessimism has historically acted as a contrarian indicator for markets, Hartnett said, with prior lows in sentiment coinciding with key turning points for equities, including in October 2023 and April 2025. Wall Street has already shown resilience in the face of heightened geopolitical tensions. Major averages posted solid gains to start the week, with the S & P 500 erasing losses tied to the Iran conflict even after U.S.-Iran negotiations over the weekend broke down. .SPX YTD mountain S & P 500 year to date “All contrarian positive for risk assets so long as ceasefire sends oil price < $84/bbl; but not a ‘close-eyes-and-buy,'” Hartnett said. Investors have not fully capitulated, with cash levels at 4.3% and positioning still tilted toward global equities. Roughly 70% of respondents said they do not expect a recession, suggesting a deeper washout in sentiment may be needed to mark a definitive bottom. For the bullish case to play out, easing geopolitical tensions and lower oil prices would be key, alongside support from rate cuts and stronger-than-expected corporate earnings, Hartnett said.
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