Investing.com — Investor sentiment has surged to its third most bullish stage since 2022, in accordance with Financial institution of America’s August international fund supervisor (FMS) survey, as money ranges hit an “uber-low” and fairness allocations climb to the very best since November 2021.
Money ranges fell to three.5% of belongings beneath administration from 3.6% in July, marking the sixth-lowest stage within the survey’s historical past since 1998. BofA’s World FMS Money Rule, a contrarian sign, stays on “promote,” triggered at any time when money falls to or beneath 4.0%.
World fairness allocation rose to a internet 56% obese, the very best since November 2021, with buyers obese equities for 14 consecutive months.
Fund managers have grown notably extra assured on the economic system. A report 56% now count on a “no touchdown” situation, and 43% forecast a “growth” consequence, essentially the most since February 2022. “Consensus conviction is not any macro touchdown, no Fed hike, no AI capex minimize, no DEM sweep, no bears,” BofA strategists led by Michael Hartnett stated in a observe.
“Positioning continues to suggest buyers retreat or rotate inside threat belongings slightly than reload,” they added.
On the financial coverage entrance, 72% of respondents don’t count on the Federal Reserve to hike charges earlier than the November midterms, up from a smaller share in July. Requested about Fed Chair Kevin Warsh’s tone on the upcoming Jackson Gap symposium, 53% count on him to be impartial, versus 31% hawkish and simply 7% dovish.
In the meantime, threat urge for food stays elevated at the same time as buyers flag considerations. Lengthy international semiconductors remains to be essentially the most crowded commerce, cited by 53% of respondents, although that’s down sharply from 82% a month earlier. The largest tail threat stays an AI bubble, named by 32%, whereas 38% see AI hyperscaler capex because the probably supply of a systemic credit score occasion. Nonetheless, 71% don’t count on any hyperscaler to chop capex this yr, and 58% don’t count on AI to disrupt labor markets earlier than 2028.
Positioning-wise, buyers rotated into tech, banks and vitality in August whereas pulling again from industrials and healthcare. U.S. fairness allocation rose to a internet 27% obese, the very best since December 2024, and emerging-market allocation additionally elevated.
is now seen as essentially the most undervalued since March 2023, with a internet 16% of buyers calling it undervalued.
The survey’s contrarian trades for August embrace going lengthy bonds and brief commodities, lengthy staples and brief tech, lengthy shopper discretionary and brief banks, and lengthy U.Okay. shares in opposition to brief U.S. shares.
