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:
Insiders say the Wall Street giant is looking to let clients count certain crypto holdings as collateral or, in some cases, assets in their overall net worth.
The two wealth tech firms are bolstering their leadership as they take differing paths towards growth and improved advisor services.
“We think this happened because of Anderson’s age and that he was possibly leaving,” said the advisor’s attorney.
The newly appointed leader will be responsible for overseeing fiduciary governance, regulatory compliance, and risk management at Cetera's trust services company.
Certain foreign banking agreements could force borrowers to absorb Section 899's potential impact, putting some lending relationships at risk.
How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave
From direct lending to asset-based finance to commercial real estate debt.