Investors are increasingly betting on a soft landing for the global economy, while big technology stocks are getting even more crowded on the expected boon to profits from artificial intelligence.
Those are key findings of Bank of America Corp.’s July global survey, conducted in the week through July 13. The firm found that 68% of surveyed fund managers expect an economic slowdown without a recession, while corporate profit expectations are now the least pessimistic since February 2022. In another sign of improving risk sentiment, investors are the least underweight global stocks this year, according to BofA.
Being long big tech stocks topped the list of most crowded trades, while 42% of polled fund managers say AI will increase profits over the next two years. Investors now see the Federal Reserve reducing interest rates in the second quarter of 2024, according to BofA; in last month’s survey they predicted a cut in the first quarter.
This year’s powerful rally in US equities is facing a reckoning in the second half as strategists warn about frothy valuations in technology shares, rising economic risks and headwinds to corporate earnings.
While some Bank of America poll indicators pointed to increasing optimism, the bank’s broad measure of fund manager sentiment, based on cash positions, equity allocation and economic growth expectations, remains “stubbornly low,” strategists led by Michael Hartnett wrote.
The global survey spanned 222 participants with $588 billion in assets under management.
Other survey highlights include:
Wealth Consulting Group, Coastline and Maridea report fresh capital, acquisitions and asset growth as advisor M&A keeps climbing
Carson Group's Dani Fava, Jason Pereira of Woodgate Financial, and Sally George of Convergency Partners led the raise as the growth-tech startup builds out its AI platform and leadership bench.
New teams from William Blair, Ameriprise and UBS bring more than $560 million in combined client assets to the firm's employee and independent channels.
Regulators this year approved UBS Bank USA’s conversion to a nationally chartered bank.
How a subprime lender’s car-loan bonds allegedly unraveled before bankruptcy.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income