US equity investors remain risk averse in June

News Team, 17/06/2022

Monetary policy and geopolitical concerns have caused US equity investors to remain risk averse so far in June.

This is according to S&P’s global management index (IMI) monthly survey, which is based on the data of 100 institutional investors operating in the US with assets under management of around $845 billion.

The number of US equity investors rose from -18 percent to -8 percent in June.

However, remaining in negative territory continues to signal persistent net risk aversion.

The survey revealed the biggest impact on the market comes from a double threat of rising interest rates issued by the US Federal Reserve, as well as the continued Russian invasion of Ukraine.

The survey also reported worsening views on the supply chain crisis, with respondents less optimistic in terms of expecting the US supply chain situation to ease before the end of the year.

As a result, more supply-driven inflationary pressures are expected into the first half of 2023.

The only factor providing any support for the market is shareholder returns, a development reflected in the dividend-friendly energy sector being the most favoured market.

Chris Williamson, executive director at S&P Global Market Intelligence and report author, said: “Around half of all survey respondents see the Fed as either having to do more than currently signalled to tame inflation or see inflation as increasingly getting out of the Fed’s control.

“Hence, we are now seeing the macroeconomy – both at home in the US and globally – exerting the biggest drag on equites yet recorded by the survey.”

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