Here’s how big investors were positioning for stagflation, even before the latest ghastly inflation reading

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Global investors are increasingly positioning themselves for an inflationary environment even before the latest report showing that inflation was rising to a 40-year high.

The Bank of America’s monthly global fund managers survey found investors to be optimistic about cash, healthcare, commodities and energy, while short bonds, discretionary consumers, utilities and equities in general.

Bank of America said the survey of managers with $ 843 billion in assets closed a day before the Department of Labor reported that U.S. consumer prices rose 8.6% year-on-year in May.

83% said they expected below-trend growth but above-trend inflation, up from 77% in May and the highest response since June 2008.

The bleak backdrop found a net negative 73% expecting a stronger economy, the worst reading since 1994. And global earnings expectations fell to a negative 72%, the weakest since September 2008.

The two busiest operations were oil and commodities, and the US dollar.

The S&P 500 SPX,
entered a bearish market on Monday, after losing nearly 10% in just four sessions amid concerns about an increasingly aggressive Federal Reserve.

10-year Treasury yield TMUBMUSD10Y,
it was 3.30% at the beginning of Tuesday, about a quarter of a point since the inflation report.

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