Bank of America Merrill Lynch released the results of a survey polling European fund managers, and one question on QE3 expectations was particularly revealing. The BofA equity strategists, led by Gary Baker, write:
Compared to when we last ran the question as to at what level of S&P 500 would they expect the Fed to announce further policy easing, investors currently seem much less able to link the two events. It is almost a case of expecting more QE irrespective of where the S&P trades.
Almost entirely. Here are the responses:
Photo: BofA Merrill Lynch
This could reflect Federal Reserve chairman Ben Bernanke’s recent emphasis on risks to the U.S. economy emanating from Europe, but this would ostensibly factor into U.S. equity prices anyways. Clearly, investors expect considerably less conditionality on the equities front for more QE from the Fed than they did in September.