These are all the major concerns investors have about the global economy right now

There is a lot to worry about the global economy right now.

And according to the Barclays Global Macro Survey of 585 global investors, there are some distinct issues that are weighing on sentiment.

Here is the killer chart from the survey that highlights investors’ biggest concerns and how some have become more of a worry over the last quarter:

As you can tell from the chart, one of the biggest issues to arise over the first quarter of this year, and almost out of nowhere, is the “weakening in the credit markets.”

Barclays said in its write up of the survey findings that “negative interest rates were viewed as a clear negative:”

Just 4% view negative rates as providing a boost for growth and asset returns, while the majority, 61%, view it as a clear negative for the banking sector and, thus, risk assets. 43% of credit investors blame negative rates for the recent widening in bank spreads.

As it relates to the ECB in the survey, investors were looking for bolder QE and slightly more negative rates. The ECB did deliver and pull all the levers, cutting all policy rates, increasing QE by EUR20bn per month, and including corporate bonds for purchases (see ECB pulls all the levers). The market initially reacted very positively, but Draghi’s statement in the press conference that rates would not go lower turned sentiment.

But there were also some other major areas of concern with a point being well made about how a decline in oil prices can be seen as good for global growth but can have a negative impact for investors who invest in certain assets:

  • The majority of investors blame the Q1 turmoil on growth disappointments, but global growth is expected to surprise modestly to the upside in Q2, yet China growth and devaluation fears have increased, while other risks have arisen.
  • Deflation is viewed as a bigger risk to markets by 72% of investors, despite the expectation that commodities will continue to move higher.
  • Oil price declines are viewed as a positive for global growth, negative for risk assets.
  • A UK exit from the EU is viewed by nearly all investors (96%) as potentially market moving, with a nearly equal split on whether it will be a UK, Europe or global event.
  • Equities were viewed as more fairly valued, vs. overvalued the past three quarters, but investor belief that equities will outperform other assets has fallen notably.

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