As higher rates for longer whipsaws market sentiment, global fund managers have edged higher their cash positions, a contrarian buy equities’ signal.
One out of two global fund managers who responded to the Bank of America’s monthly survey of their markets’ views said they expect equities to rally in the December quarter.
Investors favouring large caps over small caps jumped 18 percentage points month-over-month to a net 18 per cent, the largest monthly jump since March. Investors favouring value over growth increased by 15 percentage points month-over-month to a net 22 per cent.A majority, 60 per cent, of the managers think the US Federal Reserve has finished lifting rates, and more than half of them expect the first cut in rates to occur in the second half of 2024.
The biggest tail risk at the moment: high inflation keeps central banks hawkish 31 per cent; geopolitics worsen 23 per cent; global recession/hard landing 21 per cent; systemic credit event 15 per cent; AI/tech bubble 4 per cent; and, China real estate bust 3 per cent.
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