If you “hate” stocks, you’ll love cash.

Admittedly, this story feels a bit tired, but I try to remind myself that USD cash yielding 5% is a phenomenon unknown to an entire generation of market participants, some of whom are by now old enough to manage other people’s money.

That latter bit is still a bit unnerving. Every day, scores of young money managers with a responsibility to shepherd large sums of capital that isn’t theirs, are staring at something they’ve never seen before — namely, an asset that yields 5% but has no credit risk and no duration risk either.

It’s difficult to overstate what a shock that must be to reaction functions calibrated over a dozen years of tyranny-by-acronym (NIRP, ZIRP and LSAP).

In any case, six-month Bills get you 5% now. That could eventually become a problem for stocks in the event people tire of chasing a 2023 rally which some insist is built on a very shaky foundation.

If your question is why anyone would eschew the opportunity to sit in riskless USD cash yielding 5% amid some of the densest macro and geopolitical fog I can personally remember, I don’t have a great answer, other than to note the obvious: If you manage a stock fund, you need to own some stocks.

Outside of that, it’s reasonable to suggest that anyone not Overweight cash is perhaps succumbing to the siren song of an equity rally that refuses to heed a hawkish repricing across the US rates complex.

Note that cash levels in the February installment of BofA’s Global Fund Manager survey were 5.2%, elevated, but well off the highs, and back to levels observed prior to the Ukraine invasion.

On Wednesday, JPMorgan’s Marko Kolanovic flagged the appeal of short-end Treasurys over equities, and in an asset allocation update published this week, Goldman retained an Overweight in cash on a three-month horizon and shifted to Overweight from Neutral looking out 12 months.

“With cyclical risk premia lower and continued risk of rate and growth shocks, the risk of another ‘Balanced Bear’ this year remains high,” Goldman’s Christian Mueller-Glissmann said.

He went on: “Both for equities and bonds, the competition from cash or money market funds remains strong in 2023, with prospective yields nearing 5% in the US and little risk from either growth or rates.”

Coming full circle, Bloomberg on Wednesday published a piece called, “S&P 500 Haters Now Make Enough in Treasurys to Bid Stocks Farewell.”