Fund managers no longer expect a recession in the United States for the first time in a year and a half, according to a closely watched study.
Bank of America's monthly survey of global fund managers found that the percentage expecting a global recession in the next 12 months has turned negative for the first time since April 2022.
The survey, which surveyed 249 respondents in February with $656 billion in assets under management, is often used not only to represent market views but as a source of conflicting ideas.
The percentage expecting a stronger economy over the next 12 months remains negative, but at -25% is the most optimistic since February 2022. Only 11% expect a hard landing, while about two-thirds still say a soft landing is the most optimistic. Possible state of the global economy.
With this economic optimism, fund managers cut their cash levels to 4.2% in February from 4.8% in January, close to the contrarian sell signal from Bank of America when cash is at or below 4%.
Fund managers see the 'long Great Seven' trading as the busiest, at 61% the busiest since 64% in October 2022, with the US dollar saying the long was the busiest trading.
Related: Magnificent Seven's stock is so large, it's worth as much as all the stocks in Japan, France and the UK combined
The second busiest trade is short Chinese stocks, up 25%.
Commercial real estate in the United States has taken the lead as a potential source of systemic credit even after recent warnings from New York Community Bancorp NYCB,
Ozora Bank 8304,
Ozoe,
and Deutsche Pfandprivebank BBB,
The biggest change in allocations was a shift to telecoms, equities more broadly, technology and the US, and outside emerging markets, REITs, commodities and cash.
In general, investors are emerging technology companies, healthcare, stocks, US, telecom, UK REITs, utilities, energy and banks.
The S&P 500 SPX finished Monday close to another record high and has advanced 21% over the past 52 weeks.
The 10-year Treasury yield (BX:TMUBMUSD10Y) rose 31 basis points this year on growing optimism about the US economy.
