The result of the latest monthly Merrill Lynch survey of fund managers paints a gloomy picture. Most global fund managers polled by Merrill Lynch expect the global economy to weaken over the next 12 months, most have a bearish outlook on corporate profits and most are showing no signs that their risk appetite will be improving any time soon. A net 51% of the global fund managers expect a weaker economy while a net 48% of them expect corporate earnings to decline. Those readings are at their fourth lowest level since 2001, which is likely a response to higher oil prices and inflationary pressures, Merrill Lynch says. The survey was conducted earlier this month. However, Merrill Lynch notes that investors appear to be “holding their nerve” despite their pessimistic economic and corporate earnings growth outlook. Majority of the global fund managers polled still believe that equities are either fairly valued or undervalued. (full article)