Wall Street Mood Turns Apocalyptic With Majority Expecting "Systemic Credit Event" Out Of Shadow Banking Sector: FMS Survey

For the past several years, we have mocked the monthly Bank of America Fund Manager Survey because what it reveals is never what its respondents are actually doing, but rather what they think they should say in the context of their peers. As such, it is a game theory mirror game that while useless in revealing what is going on at any given moment on Wall Street, shine a bright light on what the dominant Wall Street reverse psychology is at any given moment.

Case in point is the following chart from the just released March FMS (available to pro subs here), in which BofA's CIO Michael Hartnett polled 244 panelists managing $621 billion in AUM. What it reveals is that one month after being long Europe - and especially its banking sector - was viewed as the most consensus bullish trade and with good reason - Europe banks were outperforming virtually every US sector and the S&P500, by a wide margin, well in March things didn't quite work out and, as the chart below shows, being long European banks quickly turned from one the best performing trades of 2023, to the worst one.