Funds recommended equity holdings be trimmed to the lowest in over four years in August, despite record-breaking gains by world stocks, as the pandemic drags on and new data suggest the nascent economic rebound is stalling, Reuters polls found.
While world stocks have risen as much as nearly 60per cent since March troughs, the poll showed average recommended exposure for equities in August in the model global portfolio was the lowest since July 2016, down to 43.1per cent from 43.9per cent the previous month. Economic recovery was foremost in Powell's remarks made as part of the Kansas City Fed's virtual Jackson Hole symposium, in which he outlined an aggressive new strategy that aims to boost employment and allow inflation to run a bit faster for longer than in the past.
That defensive outlook of long-term investors does not align with the approach of over 200 equity strategists in a separate Reuters poll this week, who expect stocks to keep rising. But they did say a sombre economic outlook was likely to push stock markets to close the year below their pre-pandemic highs.