Forget the bond rout, fund managers are in party mode

{"text":[[{"start":6.84,"text":"In case you were wondering, the Strait of Hormuz is still closed. The US economy is propped up by an AI buzz that is increasingly fuelled by vast off-balance-sheet exposures. The Fed is possibly going to raise interest rates. China’s economy is still slowing. Yields everywhere are climbing, and Japan is suffering a bond crisis. Private credit is stressed. Virtually every measure of leverage is engorged. Asian geopolitics is messy and getting messier. Europe is Europe, and the UK is being particularly British."}],[{"start":39.54,"text":"So what do the world’s leading capital allocators — the “bad boys and risk-takers” who “put it all on the line every day” — make of all this?"}],[{"start":47.4,"text":"Happily, Bank of America’s monthly fund manager survey landed in Alphaville’s inbox, so we can report that investors are being appropriately careful. Hah no of course not. Instead, the vibe can be summed up as:"}],[{"start":60.84,"text":"Or as BofA’s Michael Hartnett sums it up in less Lego-like terms:"}],[{"start":65.16,"text":"Bottom Line: August FMS is 3rd most bullish survey of investor sentiment since ‘22; cash level down to uber-low 3.5% from 3.6%, and global equity allocation surges to highest since Nov’21 (net 56% OW); consensus conviction is no macro landing, no Fed hike, no AI capex cut, no DEM sweep, no bears…positioning continues to recommend investors retreat or rotate within risk assets rather than reload."}],[{"start":95.54,"text":"Here are the actual details in Alphaville’s favourite language: charts."}],[{"start":99.66,"text":"Fund managers are currently carrying one of the lowest levels of cash in nearly three decades:"}],[{"start":null,"text":"

"}],[{"start":104.34,"text":"Equity allocations are the highest they’ve been since the 2021 euphoria (if we, like Hartnett, ignore a roguish bar on the chart between now and then):"}],[{"start":null,"text":""}],[{"start":113.06,"text":"Optimism on corporate earnings is also the highest it’s been since 2021:"}],[{"start":null,"text":""}],[{"start":117.46,"text":"The Fed apparently won’t lift interest rates imminently either:"}],[{"start":null,"text":""}],[{"start":121.18,"text":"As a result, a record number of investors think there’s nothing ahead but sunshine for the global economy:"}],[{"start":null,"text":""}],[{"start":121.68,"text":"Further reading:"}],[{"start":126.96,"text":"This is nuts upon nuts. When’s the crash? (FTAV)"}],[{"start":133.5,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1787098645_5844.mp3"}