To The Moon

Buckle up, investors! The latest Bank of America Global Fund Manager Survey is out, and it's screaming bullish vibes with a side of caution. 😎 Fund managers are ditching cash like it's yesterday's news, plunging into stocks and commodities at levels we haven't seen in years. But wait – there's a twist with AI bubble fears bubbling up. Let's dive into the juicy details! 🔍

First off, cash holdings have cratered to a razor-thin 3.7% – that's the lowest since April and dipping below the 3.8% "sell signal" threshold. 📉 Historically, this low-cash zone has popped up only 20 times since 2002, and each time, stocks have stumbled while Treasuries shine in the short term. It's like the market's flashing a yellow light amid the green rush! ⚠️ Managers have kept cash under 4% for months now, signaling they're all-in on risk assets.

On the sentiment front, optimism is skyrocketing! 🌟 The composite sentiment gauge hit 6.4, its peak since February, flipping global growth expectations to positive for the first time this year. A solid 53% are betting on a soft landing, while inflation worries cool off – net 2% now expect lower CPI ahead. No more doom and gloom; it's all about that growth glow! 🚀

Positioning? Oh boy, it's aggressive! Managers are net 34% overweight global equities, the boldest stance in months. Commodities are stealing the show too, with net 17% overweight – the most since September 2022. 🛢️ But bonds? They're trimming the underweight to just 12%, hinting at a pivot. Regionally, things get interesting: U.S. equities flipped to net 6% underweight, Eurozone down to 9% overweight, and emerging markets still hot at 36% overweight. Emerging markets could be the dark horse here! 🌍

Tech lovers, listen up: "Long Magnificent 7" is crowned the most crowded trade at a whopping 54%! 🤖 But here's the red flag – 45% flag an AI bubble as the top tail risk, up big from last month. A record 63% say markets are overvalued, and for the first time in 20 years, most investors think companies are overinvesting, especially in AI capex. 😱 53% believe AI stocks are already bubbling, though half credit it for boosting productivity. Private credit's also on the watchlist, with 59% eyeing it as the next credit crunch trigger.

Looking ahead to 2026? 42% pick international equities as top performers, while only 22% back U.S. stocks. Emerging markets get 37% votes for outperformance. For the S&P 500, 43% see it landing between 7000-7500 by year-end – modest gains, folks. 📊 And on policy, a tariff rollback could juice stocks and yields higher.

This survey polled 172 managers overseeing $475 billion – big money talking! 🤑 With frothy positioning and bubble buzz, is this the peak of the bull or fuel for more upside? Eyes on the Fed's next move; no rate cut could spell downside drama. What’s your take – all in or hedging? Drop your thoughts below! 🔥

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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