Bank of America's latest global fund manager survey finds that investor sentiment is "super-bullish" in December, reflecting a surge in optimism about economic growth and financial markets.
The survey highlights:
- Record-Low Cash Allocation: Investors have cut cash holdings to record lows.
- Record-High U.S. Stock Allocation: Allocation to U.S. equities has reached unprecedented levels.
- Global Risk Appetite: Risk appetite is at its highest level in three years, fueled by optimism surrounding U.S. President-elect Donald Trump's second term and expectations of a rate-cutting Federal Reserve.
On the economic outlook:
- Soft Landing Most Likely: 60% of investors believe inflation will be reduced without significant economic slowdown.
- No Landing Gaining Traction: 33% expect a 'no landing' scenario, where the economy continues growing in an inflationary environment, marking an eight-month high.
- Hard Landing Unlikely: Only 6% foresee a 'hard landing'—a sharp slowdown or recession—representing a six-month low in pessimism.
The findings signal widespread optimism that the economy can navigate inflation and growth challenges without significant disruption, reinforcing investor confidence heading into 2025.
***
Anybody else wary when they read:
- "super-bullish"
- Record-Low Cash Allocation
- Record-High U.S. Stock Allocation
?
In answer to a question earlier this week, or maybe late last week, I said I was closing my eyes and staying long S&P 500. I've now taken to holding my nose as well.
S&P 500 weekly candles
