The latest, "coronavirus" edition of BofA's Fund Manager Survey which polled 183 participants with $545bn AUM between April 1 and 7, found widespread fear and pessimism with most expecting a recession, a surge in cash (to levels not seen since Sept 11), expectations for a U not V-shaped recovery, and perhaps most paradoxically, bearishness at record levels... just as the S&P explodes higher with the S&P now up 16% since the start of the "cruelest month."

Courtesy of the survey organizer, BofA CIO Michael Hartnett, here are the Top 10 highlights from the latest survey:

BofA April FMS shows extreme investor pessimism…cash levels jump from 5.1% to 5.9% = highest level since 9/11 terrorist attacks; we say April = peak pessimism.

93% expect global recession in 2020; investors think global GDP cuts largely over, but global EPS cuts just beginning (rare dichotomy).

52% believe economic recovery from COVID-19 shock will be U-shaped, 22% say W-shaped, just 15% say V-shaped (Exhibit 1)…macro pessimism.

FMS equity allocation lowest since Mar'09 (when S&P500 hit 666 low during GFC)…equity pessimism.

79% want corporations to improve their balance sheets, highest in 20 years; just 5% want corporate buybacks, lowest in 20 years…EPS pessimism.

FMS investors very long cash, healthcare, staples, utilities, US, tech, bonds (Exhibit 8); very short energy, equities, materials, industrials, UK, banks, Eurozone.

57% say COVID-19 second wave = biggest tail risk, followed by systemic credit event (30%).

BofA Bull & Bear Indicator remains pinned at 0.0, i.e. investor positioning very bearish; we say one last leg up in risk rally but take profits SPX 2850-3000.

FMS bull catalyst for distressed cyclicals…health breakthrough ("V is for Vaccine") ends fear of long recession in GDP/EPS; China credit growth kicks-in.

FMS bear catalyst for growth stocks…spike in US dollar signalling credit event the 3 "weak links" of energy, Euro-area and/or Emerging Markets