Bank of America survey: Investors' optimism showed the biggest increase since June 2020

The Zhitong Finance App learned that a survey of fund managers released by Bank of America on Tuesday showed that global investors' optimism increased the most in October since June 2020 due to the Federal Reserve's interest rate cuts, China's stimulus policies, and expectations for a soft landing in the US economy.

The survey was conducted from October 4 to October 10. A total of 231 fund managers participated, and their assets under management amounted to US$574 billion.

According to the survey, cash allocation fell to 3.9% from 4.2% in September, stock allocation rose to 31%, and bond allocation fell to 15%, a record low.

Bank of America said, “Our broadest (fund manager survey) confidence index based on cash levels, stock allocations, and economic growth expectations rose from 3.8 to 5.6, the biggest monthly increase since June '20.”

According to the survey, investors expect the upcoming US election to be the most likely to influence trade policy (47%), followed by geopolitics (15%) and taxation (11%).

As far as how investors allocations are based on soft landing claims, the survey shows that global stock allocations have seen the biggest increase since June 2020.

However, according to the bank's own indicators, the sharp drop in cash levels triggered the first reverse “sell signal” since June last year.

The bank said, “Since 2011, after 11 'sell' signals have been triggered, the global stock market's return rate for 1 month after the 'sell' signal is triggered is -2.5%, and the return rate for 3 months after the 'sell' signal is triggered is -0.8%.” Currently, the Morgan Stanley Capital International Global Index has risen 0.6% so far in October, and is about to enter the sixth month of growth.