Expect Rate Cuts, Not Recession: Fund Managers Most Bullish On Stocks In Over 2 Years
Portfolio Pulse from Piero Cingari
The latest Global Fund Manager Survey by Bank of America reveals a bullish outlook on stocks, with most investors not expecting a recession in the next 12 months. Optimism is fueled by anticipated rate cuts and a decrease in inflation. Cash levels have dropped to their lowest since June 2021, indicating increased confidence in equities. The survey also notes a significant shift towards commodities, with the Invesco DB Commodity Index Tracking Fund (DBC) seeing a 5% rise in the last two months. Conversely, the Real Estate Select Sector SPDR Fund (XLRE) has declined 4% year to date, reflecting underweight positions in real estate investment trusts.
May 14, 2024 | 3:22 pm
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The Real Estate Select Sector SPDR Fund has fallen 4% year to date, amid a broader underweight position in real estate investment trusts by fund managers.
XLRE's decline is a direct consequence of the survey's findings that fund managers are significantly underweight in REITs, reflecting a lack of confidence in the real estate sector. This trend is likely to impact XLRE's performance negatively in the short term.
CONFIDENCE 90
IMPORTANCE 60
RELEVANCE 80
POSITIVE IMPACT
The Invesco DB Commodity Index Tracking Fund has risen over 5% in the last two months, reflecting growing investor interest in commodities amid inflation concerns.
The increase in DBC's price is directly linked to the survey's findings that investors are significantly more overweight in commodities now, driven by inflation concerns. This trend is likely to continue in the short term as inflation remains a top risk.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80