(Bloomberg) — Investors slashed equity allocations at the sharpest pace since the onset of the Covid pandemic during last week’s bout of market volatility, according to data from Deutsche Bank AG.
Aggregate allocation to stocks is now in the 31st percentile and underweight, strategists including Parag Thatte wrote in a note dated Aug. 9. Just three weeks ago, exposure was at the top of the historical range in the 97th percentile.
The reduction implies a slowdown in corporate earnings to the “low single digits” compared with an 11 per cent increase in the second quarter, the strategists said.
Analysts expect S&P 500 profits to rise 5.3 per cent and 11.3 per cent in the third and fourth quarters respectively, according to data compiled by Bloomberg Intelligence.
Worries about a potential U.S. recession have jolted global financial markets, with technology stocks driving the selloff. While the S&P 500 has almost recovered its…
