A new survey shows that after the recent oil price spike, investors are now concerned about corporate profitability and global growth.
The Bank of America Merrill Lynch Survey of Fund Managers for March says that 24% of fund managers now expect corporate operating margins to fall over the next 12 months. This represents the sharpest monthly decline since the survey began asking this question in 2004.
32% of fund managers are still expecting companies to increase profits in the next year, but this is down significantly from 51% a month ago.
The fall in confidence is reflected in the survey participants' macroeconomic outlook. 31% of fund managers still believe the global economy will strengthen in the next year, but this is down from 51% last month.
Investors do not expect US interest rates to rise any sooner as a result of the oil price shock. Three-quarters of them still see a rate hike within 12 months.
However, 72% of investors now think the European Central Bank will raise rates before July. No respondents held this view last month.
