Overview
- Bank of America's July 14 Global Fund Manager Survey found investor sentiment at its strongest level since February, driven by optimism about economic growth, AI-related spending and expectations that the Fed will not raise rates before the U.S. midterms.
- Cash holdings fell to an 'uber-low' 3.6% from 4.1% in June, a drop that activated BofA's mechanical contrarian sell signal and leaves managers with less dry powder to buy market dips.
- A record 54% of surveyed managers expect a 'no landing' global economy, only 2% expect a hard landing, and U.S. equity allocations rose to their largest overweight since December 2024.
- Long positions in global semiconductor stocks remain the most crowded trade at 82% exposure, and 45% of managers named an AI bubble as the top tail risk for markets.
- The survey, which polled roughly 200–400 institutional managers between July 2 and July 9, is widely watched as a contrarian indicator because extreme, one-sided positioning has historically preceded sharp market reversals.