Optimism around the Federal Reserve’s highly anticipated interest-rate cuts has boosted investor sentiment for the first time since June, according to a global survey by Bank of America Corp.
The bank’s measure of sentiment — based on cash levels, equity allocation and growth expectations — rose to 3.9 from 3.6, strategist Michael Hartnett wrote in a note. Fund managers see a 79% chance of a soft landing as rate cuts support the economy.
Still, investors are “nervous bulls,” with risk appetite tumbling to an 11-month low, said Hartnett, who last week reiterated his own preference for bonds. The poll also showed a big rotation into bond-sensitive sectors such as utilities, and away from those that typically benefit from a robust economy.
Global growth expectations improved slightly from August’s survey, but remained pessimistic with a net 42% of participants predicting a weaker economy.
US stocks have rebounded from a low in August on optimism that the economy can avoid a recession as the Fed prepares to lower interest rates. The central bank is expected to announce a first cut on Wednesday, although trader bets appear to suggest a coin toss between a 25- or 50-basis-point reduction, according to swaps data.
Hartnett said the survey indicated that economy-linked — or so-called cyclical — stocks are likely to benefit from a bigger rate cut on a tactical basis. For now, investors prefer sectors that are considered bond proxies, with exposure to utilities hitting the highest since 2008.
Investors are also the most overweight consumer staples in a year and on banks since February 2023. Tech stocks have the smallest overweight since April 2023, while energy has the most underweight positioning since December 2020.
Other highlights from the survey, which was conducted between Sept. 6 and Sept. 12 and canvassed 206 participants with $593 billion in assets:
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
