Investors have reevaluated their economic outlook, abandoning recession concerns for the first time since April 2022, according to a recent Bank of America survey. The global shift in sentiment is highlighted by a substantial decrease in cash levels and a simultaneous increase in equity allocations among investors, marking the most optimistic stance in two years. With a combined $568 billion in assets, fund managers are demonstrating their confidence by reducing cash reserves from 4.8% to 4.2% and elevating global stock allocations to a two-year high.
The survey identifies the “long Magnificent 7” as the leading crowded trade, followed closely by “short China stocks.” Additionally, tech allocations have reached their highest point since August 2020, showcasing a growing appetite for technology investments.
Bank of America’s “Bull & Bear Indicator” has surged to 6.8, signaling a potential headwind for risk assets due to increased investor positioning. The results of the survey reflect a notable shift in market sentiment, underlining a renewed sense of optimism among global investors.
