Fund managers haven’t been this bullish since they were under the impression that Donald Trump would be a stock-friendly president.

I’m just kidding, Republicans. Given how hard you laugh at accumulating evidence of democratic backsliding, I thought you had a sense of humor.

Anyway, the 175 professionals who took time away from their summer vacations to participate in the July installment of BofA’s monthly smart money poll were collectively the most optimistic since February, as risk appetite increased a third month.

As the figure above shows, we’ve just witnessed the largest three-month jump on the survey’s net risk appetite metric in the history of the poll.

Although respondents — sorry, “panelists” — continue to fret over the trade war and expect the average US tariff rate to settle at 14% (nearly five times the pre-“Trump 2.0” rate), profit expectations improved markedly.

Specifically, the net share expecting lower profits over the next year was just 11% this month, much better than June’s survey.

Note from the chart that in April, amid the “Liberation Day” panic, almost everyone expected profits to deteriorate. As Michael Hartnett pointed out, the rebound from that rather unfortunate episode marks the biggest three-month improvement since August of 2020, which is to say since the pandemic.

Hartnett described sentiment as “toppy,” but was quick to point out that the equity Overweight’s “not yet extreme,” and with bond vol still subdued, it’d be premature to turn overtly bearish.

Greed, he wrote, is “always much harder to reverse than fear,” and investors are “more likely to stick to a summer of hedging and rotation rather than big shorts and retreats.”

Now cue the traditional August vol shock.