Bank of America Survey: Fund Manager Optimism Hits Two-and-a-Half-Year High, Bullish on "Seven Giants" for 15 Consecutive Months as the Hottest Trades
According to the latest survey by Bank of America, fund managers' optimism continues to rise, with almost no one now expecting a hard landing for the US economy
According to the latest survey by Bank of America, fund managers' optimism continues to rise, with almost no one now expecting a hard landing for the U.S. economy.
A survey of 238 fund managers managing $721 billion in assets in June showed that their sentiment index (based on cash levels, stock allocations, and economic growth expectations) has risen to the highest level since November 2021.
The percentage of fund managers expecting an economic hard landing decreased from 11% in May to 5% in June. Those expecting a soft landing increased to 64%, while those not expecting any landing decreased to 26%.
More than 50% of respondents still expect no economic recession in the next 18 months, but this proportion is lower than the 53% in May, and expectations of an economic recession in the second half of 2025 are also rising. Regarding the Federal Reserve, 78% of people expect two, three, or more rate cuts next year.
Strategist Michael Hartnett wrote: "'Long the Big Seven'—Apple (AAPL.US), Microsoft (MSFT.US), Google (GOOGL.US), Amazon (AMZN.US), Nvidia (NVDA.US), Tesla (TSLA.US), and Meta (META.US)—have been the most popular trades for the 15th consecutive month and are currently the most crowded trade, accounting for 69%."
"In the history of this survey, there are few single trades more crowded than this... In October 2020, the proportion of 'long U.S. tech stocks' was 71%, in September 2020, it was 80%, in July 2020, it was 74%, in June 2020, it was 72%, and in February 2015, it was 72% for 'long the U.S. dollar.'"
Other crowded trades include long gold, long the U.S. dollar, and long Bitcoin.
Hartnett stated: "32% of respondents still see 'inflation worsening' as the top tail risk, a significant decrease from 41% in May. Concerns about 'geopolitics' have risen from 18% in May to 22%, remaining in second place. Risks related to the 'U.S. election' have increased from 9% to 16%, ranking third."