BofA Survey: Global Investors Most Bullish Since February on Economic Outlook
Bank of America Global Fund Manager Survey Insights
MILAN, July 14 (Reuters) - Global investor sentiment has climbed to its strongest level since February, with fund managers growing more optimistic on the economic outlook, artificial intelligence-linked spending and the prospect of a dovish Federal Reserve, Bank of America's latest Global Fund Manager Survey showed.
Shifts in Cash Allocations and Economic Expectations
Cash allocations fell to an "uber-low" of 3.6% from 4.1% in June, level that triggered BofA's contrarian sell signal, while a record share of respondents said they expect a "no landing" for the global economy.
Survey Timing and Context
The survey was carried out between July 2 and July 9, after the interim deal to end the U.S.-Iran war and largely before hostilities resumed.
Key Findings from the July Survey
Investor Sentiment and Market Outlook
- Investor sentiment rose to its highest level since February, reflecting optimism about economic growth, AI-related capital expenditure and expectations for easier monetary policy.
- A record 54% of respondents expect a "no landing" scenario for the global economy, while only 2% anticipate a hard landing.
- U.S. equity allocations were raised to the highest overweight position since December 2024.
Trends in Sector Allocations and Trades
- Long global semiconductor stocks remained the market's most crowded trade for a third consecutive month, cited by 82% of investors.
- While some investors trimmed technology positions in July, none reported being short the sector.
- 61% of respondents say hyperscalers are unlikely to cut capital expenditure this year, versus 28% expecting reductions.
Risks and Expectations for the Future
- AI bubble risks rose to the top spot among largest tail risk facing markets, pointed to by 45% of respondents.
- 83% do not expect the Fed to raise interest rates before the U.S. midterm elections in November.
- Investors cut their end-2026 oil price forecast to $71 a barrel from $86 in June.
Reporting and Attribution
(Reporting by Danilo Masoni)
