Professional investor sentiment improved this month, and thank goodness for that.

Recall that last month’s installment of BofA’s closely-watched global fund manager poll was among the most bearish ever. Had the mood worsened in May, the survey title might’ve been “Suicide Watch.” The corollary, though, is that in the context of abject despondency, “improvement” is a relative term. Sentiment’s still quite subdued.

To address the elephant in the room, the poll was conducted from May 2 to May 8, which means only some of the responses reflected anticipation of a US-China trade detente. The talks in Geneva were announced on May 7.

“Pre-Geneva investor sentiment [was] glum, especially on US assets,” BofA’s Michael Hartnett said, noting that 75% of panelists handed in their responses prior to the announcement of the talks.

It’s safe to assume no panelists anticipated such a dramatic cut to bilateral tariffs, which in turn means Hartnett’s survey, despite being conducted just a few days ago, is already stale. I’ve said it time and again over the last four months: If it didn’t happen five minutes ago, it’s old news when Donald Trump’s president.

Still, the results are worth highlighting. A net 59% expected weaker global growth earlier this month (figure on the right, below). That share was a whopping 82% in April. Recession expectations were roughly balanced, whereas they were skewed sharply towards a downturn in April.

As the figure on the left shows (click to enlarge, as always), “soft landing” is the consensus again, at 61% share of the “landing” scenario responses. “Hard landing” fell back to 26% after taking half the vote in April.

Cash levels, which jumped to 4.8% in April, slipped to 4.5% which Hartnett was keen to note is still “bearish enough to suggest [the] pain trade is modestly higher given the positive US-China trade war ceasefire.”

That’s an important consideration. Exposure and positioning were obviously bombed-out in April and at least at the index level, nobody was hedged for a run to new records (see the figure on the left, below, which shows SPX call skew loitering haplessly just prior to the Geneva talks).

There’s some nuance, though. First, as Nomura’s Charlie McElligott noted last week, some of the depressed call skew reflected over-writing behavior — i.e., market participants writing calls for income in an environment where upside was seen capped by an indeterminate macro outlook.

Second, big-tech call skew had steepened meaningfully off the lows, as shown on the right, above. That, McElligott wrote on May 8, showed “how people [were] hedging their underexposure to right-tail tariff outcomes.” In short: They were playing for upside in hate-sold shares or in high fliers-turned Icaruses.

There’s a kinda/sorta parallel in BofA’s May fund manager poll. As the figure on the left shows, investors’ allocation to US equities dropped “even further,” to a net 38% Underweight.

And yet, tech allocations jumped by 17ppt in May, the most pronounced monthly increase in over a dozen years.

Make no mistake, at net neutral, BofA panelists’ tech exposure’s still very low versus history, but the point is just that anyone playing for a rebound appears to have favored tech as the best expression.

In any event, the overarching takeaway from BofA’s May survey was simply that investors were meaningfully more constructive versus April, but as noted here at the outset, that’s not saying a lot considering how poor sentiment was in and around “Liberation Day.”

“Trade war triggers a global recession” was still seen as the biggest tail risk, capturing nearly two thirds of the vote.