Traders turned extra optimistic concerning the international economic system in February, flocking to rising market shares and chopping their money holdings to ranges final seen since earlier than the struggle in Ukraine, a BofA survey of world buyers confirmed.
The survey of 299 fund managers, with a mixed $847 billion in belongings underneath administration, discovered buyers had been nonetheless broadly cautious, however much less so than been in latest months. Simply 24% predict a recession in comparison with 77% who did in November, based on the survey performed within the week to Feb. 9.
Traders stay internet chubby money and underweight equities, however a mixed index that measures progress expectations, money allocations and fairness allocations improved to its highest degree in a 12 months.
The survey displays a broad sweep increased in share costs. MSCI’s all nation world index <.MIWD00000PUS> hit a nine-month excessive on Feb. 2, although has since softened slightly.
These strikes, stated analysts, had been largely pushed by hopes that main economies would keep away from a recession, whereas inflation would proceed to fall, notably within the U.S. permitting the Federal Reserve to be much less aggressive in terms of financial coverage.
“(Fund supervisor survey) buyers stay pessimistic in February however to a lesser diploma, with all key measures of sentiment enhancing (month on month) and shift in positioning highlighting stronger danger urge for food,” BofA analysts stated in a observe.
The survey discovered the share of buyers who’re chubby rising market equities elevated by 51 share factors from November 2022 to February, marking the biggest three-month enhance on file.
It additionally discovered that “lengthy China shares” was now probably the most crowded commerce together with lengthy funding grade bonds, changing lengthy US greenback money.
China abruptly scrapped a lot of its restrictions on life and journey aimed toward curbing the unfold of COVID-19 late final 12 months, sending Hong Kong’s benchmark Grasp Seng Index .HSI to an 11-month prime in late January.
BofA famous nonetheless, that whereas buyers had been the least pessimistic since February final 12 months, positioning was not optimistic sufficient to be a catalyst to promote.
Excessive positioning in an asset is usually seen as a unfavourable, because it suggests there are comparatively few buyers left to purchase and many who might determine to promote.
Supply: Reuters (Reporting by Alun John; Modifying by Amanda Cooper and Mike Harrison)