S&P 500 daily
US stocks are set to open higher with S&P 500 futures up 0.5% and Nasdaq futures up 1.0%. Both will be fresh 52-week highs.
Stock markets are cheering a benign inflation report and a high likelihood (95% implied) that the Fed will leave rates unchanged tomorrow.
Here’s what Bank of America’s fund manager survey reveals.
Bottom line: pain trade for risk assets still up; true FMS cash levels lowest (5.1%) since Jan 22 but investors cut commodities to 3-year lows, still UW stocks, exclusively long IG bonds (8-year high) & tech as start of “soft” recession/Fed cuts punted to Q4/Q1 and inflation expectations sink to 28-year low; BofA Bull & Bear Indicator up to 3.7.
Al: Impact of Al adoption next 2 years – bullish…40% say higher profits, 2% say more jobs, 14% higher profits & Jobs, 29% say Al won’t increase profits or jobs.
Macro: growth expectations (net -62%) v low, China flip-flops back to pessimism but just 2% think inflation up next 12 months…consensus = “soft” landing (64%) not “hard” (26%) or “no” (3%); note Fed not done hiking say 59% (61% said opposite in May).
AA: allocators cut cash (19-month low), but also stocks (to 5 month low) despite FOMO bull price action, cut commodities (37-month low), raise real estate & alternatives.
Stocks: most crowded trade-long Big Tech (55%), then short China; Investors now long Japan (19-month high), reduce UW in US (6-month high), stay long tech, rotate to health care, banks, value>growth, and cut exposure to energy & staples.