As Markets Sweat Wuhan Virus, Here’s Where The S&P Is Headed According To $740 Billion In AUM

“FMS investors’ allocation to global equities has risen from net 12% underweight to net 32% overweight since Aug’19”, BofA’s Michael Hartnett writes, in the January edition of the bank’s closely-watched Global Fund Manager Survey.

That, he goes on to say, is “the biggest jump in equity positioning since 2011”. This month, a total of 249 panelists who together control some $740 billion in AUM participated in the poll.

The good news for those of you brave enough to hang around as stocks scale ever higher peaks, is that equity positioning in the survey is “still below [the] net 50% OW level consistent with prior market tops”.


Asked “When do you expect equity markets to peak”, the weighted average response was in the third quarter of this year.

In terms of levels, those surveyed see upside to 3,400, which Hartnett notes is “up from 3022 in Dec’18 and the highest since the question was first asked in Jun’18”.


If you’re wondering how that stacks up to Wall Street, the average year-end target is 3,355 and the median is 3,400.

Tuesday seems like a good time to take stock (figuratively and literally) of where everyone stands, given that, for the first time since the targeted assassination of Qassem Soleimani earlier this month, risk assets are looking shaky thanks to fears of a viral pneumonia pandemic.

Below is the full breakdown of house calls organized by bank, strategist, target and EPS forecast:

  • Bank of America; Savita Subramanian; 3,300; $177
  • Bank of Montreal; Brian Belski; 3,400; $176
  • Barclays; Maneesh Deshpande; 3,300; $166
  • BTIG; Julian Emanuel; 3,450; $175
  • Canaccord; Tony Dwyer; 3,440; $172
  • Citigroup; Tobias Levkovich; 3,375; $174.25
  • Cornerstone Macro; Michael Kantrowitz; 3,400; $172
  • Credit Suisse; Jonathan Golub; 3,600; $175
  • Deutsche Bank; Binky Chadha; 3,250; $175
  • Evercore ISI; Dennis Debusschere; 3,400; $178
  • Fundstrat Global Advisors; Tom Lee; 3,450; $178
  • Goldman Sachs; David Kostin; 3,400; $174
  • Jefferies; Sean Darby; 3,300; $176
  • JPMorgan; Dubravko Lakos-Bujas; 3,400; $180
  • Morgan Stanley; Mike Wilson; 3,000; $165
  • Ned Davis Research; Ed Clissold; 3,425; $168
  • Oppenheimer; John Stoltzfus; 3,500; $175
  • RBC Capital Markets; Lori Calvasina; 3,460; $174
  • Scotiabank; Hugo Ste-Marie; 3,350; $167
  • Societe Generale; Sophie Huynh; 3,050; $164
  • Stifel Nicolaus; Barry Bannister; 3,265; $167
  • UBS; Francois Trahan; 3,250; $170
  • Wells Fargo; Chris Harvey; 3,388; $166

Who you got? Are you more of a Golub type or are you a diehard Mike Wilson fan?

As BofA’s Hartnett notes on Tuesday, “the dominant concerns of investors since 2011 have been Eurozone debt and potential breakdown, Chinese growth, populism, quantitative tightening and trade wars”.

But US politics took the top slot for the first time this month, with nearly a third of respondents saying the election is the biggest tail risk. Trade war was #2 and “Bond bubble popping” took the #3 slot.


As far as we know, “pneumonia apocalypse” wasn’t a box that was available to check.

Maybe next month, though.

Assuming we’re all healthy enough to respond by the time the February questions go out, that is.


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