Investors queasy about global economy

A new survey indicates that investors are taking their dimmest view of the global economy since the height of the European debt crisis, this as the trade tensions between the U.S. and China near their peak.

Broadly speaking, pessimism about the global economy is at its highest point since December 2011, according to the Bank of America Merrill Lynch Fund Manager Survey for September. A net 24% expect global growth to slow down over the next 12 months, a steep rise from the net 7 % believed the month before.

The fears are showing up in portfolio movements. Cash is at 5.1%, the highest allocation in 18 months.

Remarkably, the U.S. has managed to maintain economic growth levels above most of the developed world. Gross Domestic Product rose 4.2% in the second quarter, and the Atlanta Fed projects a 4.4% increase in the third quarter. Another survey from CNBC, however, points to a more subdued 3.2% increase.

A net 48% of respondents think the U.S. economy will decelerate in line with its neighbors. Part of that trend is centered on the belief that the U.S. Federal Reserve will continue raising interest rates amid concerns that growth and inflation could be getting out of hand.

However, that hasn't necessarily soured investors on U.S. stocks.

Allocation to the American market rose by two percentage points to a net 21% overweight, the biggest reading since January 2015. U.S. stocks were the most preferred global market for the second month in a row; allocation to global stocks fell to near an 18-month low.