What’s next? A U.S. downgrade or Spanish bailout?
What will happen first? A U.S. credit rating downgrade or the country’s unemployment falling below 7 percent?
Or Spain having no other option but to ask for a bailout?
Bank of America Merrill Lynch asked investors in its monthly fund manager survey what “surprises” they saw coming up first this year.
And the result is: bad news will come first.
A U.S. debt downgrade got the top spot, with more than 35 percent of investors seeing that happen first, with crisis-hit Spain having to ask for more help a close second, at just over 30 percent.
The United States will have to wait a bit longer to cut its unemployment below 7 percent, with only about 12 percent seeing that happening first. Only 10 percent bet on Japan weakening its currency to 100 yen to the dollar and very few chose gold hitting $2,000 an ounce.
For the bank, it shows pessimism is still alive and kicking despite investors’ more positive view on the global economic outlook. It said in the report:
Despite the most bullish fund manager survey since February 2011, investors still think downside surprises (US debt downgrade & Spanish bailout) are more likely than upside surprises (US unemployment below 7% & 100JPY=1USD).