For all the talk of a “FOMO”-driven equity rally, plain old fear is still more pervasive than greed.

Or at least in the minds of some 250 respondents who participated in the July vintage of BofA’s closely-watched Global Fund Manager survey, which the bank’s Michael Hartnett described as still bearish (like him).

Although profit expectations were the least pessimistic in 17 months, a net 60% still see global growth decelerating.

The current conjuncture, characterized by subdued growth expectations and buoyant equities, is a “mirror image” of 2001-2003, Hartnett remarked. Back then, “investors became more bullish on the macro but the S&P failed to catch,” he said.

There’s no failure to “catch” for stocks currently. US equities are within shouting distance of new record highs. That’s strange to say, but then again, these are strange times.

In another example of investors’ apparently dour growth outlook, the FMS survey revealed the largest commodities Underweight since April/May of 2020, when the future of our species was in doubt and crude was briefly worth less than nothing.

Hartnett called it “capitulation,” and noted that the last three months represent the most dramatic rotation away from commodities in a decade.

Part of that is attributable to ongoing concerns about the outlook for the Chinese economy, which continues to underperform. In February, four out of five FMS participants expected China’s economy to accelerate. That figure is just one out of five now. As I put it earlier this week while documenting China’s Q2 GDP figures and June’s activity data, “a sense of fatalism has set in” among investors regarding China’s economic prospects.

As usual, it wasn’t possible to reconcile all of the responses to the BofA survey, although Hartnett did his best. A large majority still see a recession by the end of next year, and nearly half expect a downturn by the end of Q1 2024.

And yet, nearly one in five respondents doesn’t expect a recession at all within the next 18 months. That was up sharply from June.

At the same time, Hartnett noted that “conviction is very much solidifying around a soft landing,” while perceived hard landing odds are falling.

Of course, recession and soft landing aren’t necessarily mutually exclusive, but I think it’s fair to say there’s a bit of cognitive dissonance among the $650 billion in AUM that responded to BofA’s poll this month.

To the extent that’s true, it’s forgivable. After all, the outlook has rarely been more indeterminate.