Reply #30: Fund Manager optimism pulls back over Fed uncertainty - fearing "R" word [View All]

[UpInArms]

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB184F617%2D82B2%2D4A3F%2DA4B0%2D0E6B1BA2CC11%7D&symbol=&siteid=mktw&print=true&dist=printTop

BOSTON (MarketWatch) -- Renewed uncertainty over monetary policy with a new Federal Reserve chief has fund managers turning more bearish on stocks even as managers cut their cash stakes to five-year lows in January, according to a monthly fund manager survey compiled by Merrill Lynch.

"There is an unmistakable change of tone in the survey this month," Merrill noted in the survey, the first since Ben Bernanke took over as chairman of the Fed.

Half the managers polled think the Fed has not finished tightening, and nearly two-thirds see the yield curve remaining flat or growing more inverted over the next year.

Average cash balances among 221 funds have risen to 4.1% from 3.5% the previous month.

Meanwhile, managers have a reduced appetite for risk and fewer reported they are confident the U.S. economy won't slip into recession, to 74% from 86% in January.

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