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Bank of America’s latest fund manager survey finds fund selectors are lowering funding levels as banks take the most bullish stance on global economic growth in two years. did.
The cash ratio was lowered to 4.2% from 4.8% as investors continue to focus on US tech goods in hopes that the central bank will cut interest rates sooner rather than later, but on Tuesday a higher-than-expected US inflation rate Optimism was slightly dampened. .
This is the first time since April 2022 that a majority of investors do not expect a recession, with 65% expecting a soft landing and 19% expecting a negative outcome, according to a survey of 249 fund selectors with $656 billion under management. 11% expected a hard landing. Assets Under Management (AUM).
According to BofA, optimism has led to the ‘Magnificent Seven’ being the most crowded trade since long USD in October 2022, with 61% of respondents choosing US mega-cap tech stocks as their most popular allocation. He cited exposure to
This was followed by short Chinese stocks (25%) and long Japanese stocks (4%).
European investors poured $7.4 billion into U.S. stock ETFs this year, according to Bloomberg Intelligence, highlighted by the S&P 500 reaching 5,000 points for the first time last week.
In January, the iShares Core S&P 500 UCITS ETF (CSPX) received $2.6 billion in inflows, the SPDR S&P 500 UCITS ETF (SPY5) received $922 million in inflows, and the Vanguard S&P 500 UCITS ETF (VUSA ) recorded net new assets of $620 million.
Risks to Mantra are fueling optimism about lower interest rates. Just 4% of respondents expect short-term interest rates to rise, while 7% expect inflation to rise.
Additionally, 85% of respondents expect the yield curve to steepen.
However, CPI inflation in January was 3.1%, below the 3.4% recorded in December but above the consensus estimate of 2.9%, meaning investors may have to wait even longer for the Fed to begin its rate-cutting cycle. There is a possibility that it will not happen.
“The Fed is currently making monetary policy decisions based on incoming data, so this print will likely delay the timeline for rate cuts,” said Rob Clary, investment strategist at Evelyn Partners. said.
“This comes on the back of better-than-expected economic growth, a big upside surprise in January’s US jobs report, and solid wage growth.”
Traders now expect between six and four rate cuts in 2024, with a 30% chance the first rate cut will take place in May, down from 85% in December.
The S&P 500 Index tumbled 1.4%, and the 10-year Treasury yield jumped 12 basis points to 4.27%, its highest level since late November 2023.
Additionally, among 27% of fund managers surveyed, rising inflation is seen as the biggest risk to the global economy, followed by geopolitics (24%) and systemic credit events (16%). ing.
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