Folks in today's video: I'm going to break down exactly what the big money is saying, thinking and doing behind the scenes. Now, the information that I'm going to share with you in this video is not technically public. In fact, the firm that gathers this information hides the results and only sends it to their direct clients, to their Affiliates and to their staff members. But of course, once it is sent out, it starts leaking all over the place.

And so I've gone ahead and I have compiled a bunch of different leaks of this data from a lot of different sources. whether that's actually from mainstream media leaking parts of it or Twitter or various social media platforms or people directly sent it to me. So if you appreciate all the work that goes into finding and making a video like this, make sure to hit that ravishing like button below and also subscribe to keep up to date with us. But let's get right to work.

Okay, so B of A went and they pulled 371 Global fund managers who controlled a combined 1.1 trillion dollars worth of assets. So what did they find? Well first, they found that there's close to a record share of on manager survey investors expecting a weaker economy in the next 12 months. Stop the process. Who would have thunk that? But look at this trend.

The dark blue line represents the net percent of fund managers expecting a stronger economy and that's at its lowest point. In the last 30 years, we are now well below March 2020 levels, a period of time where people were assuming the worst because of shutdowns and uncertainty over the virus, and this has corresponded with the S P 500 year-over-year performance. that is just completely abysmal. If you are a fund manager and you are expecting a weaker economy in the next 12 months and you're also looking at higher interest rates discounting multiples into 2023 even further.

Obviously, that destroys a big incentive to use Capital to buy dips in some cases or even stay in positions. But there's another way to look at this capitulation. Right now, fund managers are surrendering completely surrendering to the weaker economy narrative at record levels, which as an inverse indicator, suggests that a bottom may be sooner rather than later. Now that bottom may very well be a short-term short-lived bottom and I think it will be, but a bottom nonetheless, something that sets you up for a sizeable bear Market rally, which is what we've been talking about the last couple of days.

But I mean you look at the December 2000.com bust era forecast and the market still continue to deliver negative returns year over year for several years after, even though the net percentage expecting a stronger economy bounced. So just because you get a bear Market rally and a short-term bottom does not mean that your year over year is going to look any good or improve for a while. Now, this next chart is the average cash balance amongst these surveyed fund managers. These investors are now holding more cash than they had in April 2020 and any time in history since the.com bus days 20 plus years ago.

Many analysts are also calling this a form of capitulation, this idea that fund managers are surrendering to the Fed and saying okay, you know what I'm going to hold cash I'm not going to fight the Fed I'm going to wait until the Fed's battle is over and then we can redeploy cash now. obviously when cash is being shored up at this level that has to come from somewhere and it comes from assets which are now seen reduced prices. but it's also Firepower that can be redeployed back into markets at the end of the day. If you remember after April 2020, that cash storage ended up plowing back in markets for the next 18 months and pump things back up.

So from a market perspective, these levels of cash suggest a lot of upside when Global fund managers get the green light again and it's go time again. But in the meantime, Market liquidity is deteriorating fast as this cache has left the market in Spades The percentage of fund managers that rate liquidity conditions as positive is at the worst level since April 2020.. Now, as we know, liquidity in a broader sense will only get worse and more and more dry as we go into 2023. As a result of generalized quantitative tightening during the pandemic, the FED increased liquidity throughout the system and that had a very, very settling effect on the overall market and created insane amounts of liquidity.

Well, now the FED is doing the opposite. Quantitative tightening has a very, very severe effect on the entire Financial system, which of course the stock market is a part of. Next, What do Global fund managers see as the biggest tail risk? and again I apologize for the blurriness in advance. Again, these are all leaked data sets that we had to find across the internet.

Bank of America doesn't make this public and Beggars can't be choosers. But the biggest tail risk investors indicated in 2018 was the FED European Central Bank and Chinese Central Bank policies which all were timing at the time and then you had the U.S China trade war and then you had the virus and a month or so of presidential election fear the 2020 election. and since February or March of 2021, the consensus has been very much focused on inflation and hawkish central banks as being the number one in two issues with Russia Ukraine and a global recession taking first place and only a few of the recorded survey since then, and as of October, that trend has continued. When asked at the end of last month what the biggest specific tail risks were inflation, Staying High was considered a bigger tail risk than hawkish central banks or any other major line item.

Earlier in the summer, managers were more scared of hawkish central banks than they were of inflation. but that has quickly changed again. Remember, markets were very, very upset when the FED started doing anything because they're like what the FED is over attacking over attacking inflation when in reality. Obviously, the FED has been behind the curve almost every step of the way.

but it's just a cycle of fund managers thinking they're going too heavy or going too light now. I Want to continue on with when Global Fund managers expect a pivot from the FED But first, a word from today's sponsor MooMoo and the up to 15 free stocks that you can get if you open an account and deposit with my link down below Australian Users can get up to 50 AUD cash back. terms and conditions apply. So let me ask you this question: Would you show up to battle without the proper weapons? I wouldn't.

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This month, it's set. so the number of participants expecting a Fed pivot within the next 12 months has doubled, and the number of participants expecting higher rates in the next 12 months is falling pretty rapidly from 92 percent to 59. And this is what that looks like on the chart. You can see the percentage of managers expecting a pivot in the next 12 months is skyrocketing and the percentage expecting rates to be higher is dumping.

Now, that doesn't mean that there's a consensus that the FED is pivoting in the next 12 months, but it does mean that it's starting to shift in that direction pretty aggressively. But keep in mind that while fund managers are expecting a pivot, the truth is they are still expecting a higher terminal rate and we know this, but this is what it says. Fund Manager survey investors have repriced their expectations for terminal Fed Futures rates 50 basis points higher to the range of 4.5 to 5 percent in the past month reported Seeking Alpha This is pretty consistent with what we've been following and showing on the FED Futures, but in terms of a pivot, keep in mind that Bank of America last week said a quote big low in markets is coming, but it's still waiting for signs of panic from the Fed. The wait, however, continues as the economy is still too strong for policy makers to consider cutting rates.

The FED funds rate stands at a range of three to three point, two five percent currently. So it's like while people are expecting a pivot from the Fed, the truth is that inflation is still far too high and unemployment far too low in order to actually justify a Fed pivot. If the economy can still take more timing at the same time where the economy is having out-of-control inflation. well, obvious, obviously, the FED has to continue tightening.

Now, what are Global Investors bearish on? Well, pretty much everything, but specifically UK and Eurozone Assets In terms of absolute positioning, those are doing the worst. And then you have the US emerging Markets and Japan I bet. If the FED pivots before the European energy crisis and Ukraine situation is solved, you're going to start seeing a lot of the sideline Capital that would have invested in the Eurozone or UK dips, start going back and invested in the U.S and you go over to data on allocation to equities. The net percentage of fund managers overweight equities is lower than at any point than at any point in the last 20 years.

Fund managers are like equities. Ah, no, thank you. I'll just take some Usds to go as the earning season gains traction. 83 percent of investors expect Global profits to worsen over the next 12 months.

A net 91 percent said. Global Corporate profits are unlikely to rise 10 or more in the next year, the most since the GFC a sign that suggests further down side to S P 500 earnings estimates. So right now there is a very widespread and growing consensus that says what it says: Global profits are going to be worsening over the next 12 months, and that level of pessimism in corporate earnings is the worst we've seen since the Great Financial Crisis. Now, what do survey participants see as crowded trades? The top answer in September was long U.S dollar.

The top answer this month was also long US dollar, but it got even more votes then you had some people arguing that shorting EU equities is too crowded right now longing ESG assets that's too crowded right now Oil crowded but a little bit less crowded than the others and some Emerging Market China debt and UK debt and Equity crowding as well. But the US dollar has had so much Capital flow into it that quite frankly it's breaking records left and right. This is a chart from the IMF that shows how other currencies have changed year to date relative to the holy U.S dollar, Canada Australia the Euro area, Korea Japan UK All currencies down quite abruptly when compared to the USD year to date, and a ton of Emerging Markets as well. Turkey is down some 30 percent when compared to the USD.

So yes, right now, participants believe that the USD is the most crowded trade and when the USD is strong, what happens, it weakens the U.S economy and makes us less competitive abroad, which hurts our company's bottom lines and tends to correspond with a bigger trade deficit which I believe is exactly what's happening if you look at current data that's coming out. But I Found this data set here to be very, very fascinating. This is the evolution of what fund managers thought were the most crowded trades in the last 10 or so years. Right now, of course it's long USD Then it was long Commodities Then it was long tech, then long Commodities then long Bitcoin Tech Bitcoin U.S Tech and growth and then treasuries.

U.S treasuries. And if you know your recent history, you already know that pretty much a quarter or in some cases a month after these were considered crowded trades. Well, you saw their respective value Peak out and start plummeting and the trend changed to something else. You had a massive pumping and then dumping a of tech and growth, then Bitcoin then overall attack.

Then you saw some back and forth with commodities, but a lot of major Commodities are now on an overall downtrend. Some have completely plummeted outside of energy components, but overall they've definitely downtrended. So if this trend continues where the most crowded trade tends to have periods of time afterwards where they're no longer very crowded, Well, that means that the long USD trade may very very well soon be over. What would cause the USD to plummet? well? A tanking economy? A expectation of more stimulus measures? A reversal reversal? A pivot from the FED A reversal from the Fed So I mean for folks who want to see the bright side on this report, Well, I Think that it can be summed up by saying that a lot of participants right now are expecting a change of trade that does tend to point to a short-term bottom and bear Market rally in the near future and a Fed pivot that may be a lot faster than the worst case scenario which may actually come in maybe maybe the first quarter of 2023.

Now I Think the FED would be very, very giddy to do it then. I Think the FED needs to wait until inflation actually goes downsizably and shows evidence that it's not just going right back up, but a big takeaway from this overall survey and all of these scraps of information I was able to pile together is that a lot of global fund managers expect the FED to Pivot sometime within the first quarter or two of 2023, and at the same time, they expect the market to bottom sometime around early 2023 when the recession really starts getting going. So I don't know, folks, you agree with these findings. What are your thoughts on when we bottom and when the market starts going back up? Let us know down below.

Do you think we have yet to experience that big low that Bank of America has been warning us about and will happen when the FED does its last. Massive Panic Well, let us know your thoughts down below. Anyways, folks that caps off today's video, make sure to get your up to 15 free stocks with MooMoo using our link down below. Make sure to take advantage of our flash 40 coupon code on zip Trader U which expires October 21st which is this Friday And of course make sure to subscribe and I will see you in the next video.