Nearly 200 professional investors who, between them, manage less than half of what Elon Musk’s now worth on paper, are “steadfastly bullish.”
That was the overarching takeaway from the June installment of BofA’s closely-watched Global Fund Manager poll, released on a day when SpaceX’s market cap was on track to eclipse that of Amazon and Microsoft.
Most of the key metrics in the BofA poll came off a bit versus May, even as they remain indicative of optimism around global growth and profits.
The figure on the left, below, shows you the aggregate that rolls up cash levels, equity allocation and growth expectations to measure broad sentiment. It slipped from last month, but nevertheless reflects a generally sanguine view.
The figure on the right shows cash levels rising to 4.1% of AUM. That’s obviously quite low, but that metric’s no longer in contrarian “sell” territory.
“Optimism on the macro’s not off-the-charts,” the bank’s Michael Hartnett wrote, in the course of pointing to expectations for short-term rates, which are now the highest since September of 2022.
Who remembers September of 2022? That was “peak Fed hawks” (in terms of Committee disposition) and it was also “peak dollar wrecking ball” for the cycle.
A net 34% of BofA survey panelists expect higher short-term rates over the next year. 40% see the Fed hiking at least once over that same window. That share was just 16% in May, Hartnett remarked.
Once again, a second inflation wave topped the biggest tail risk list, although “AI bubble” is moving up fast.
Two months ago, a mere 5% of survey respondents said an AI bubble was the biggest risk. In June, that share was up to 28%.
Also notable: The semi rally garnered the distinction of the most consensus crowded trade in the history of BofA’s poll, garnering 80% of the vote.
When BofA asked panelists what stage of the investment cycle AI stocks are currently in, more than half (56%) said “boom” versus just 21% who said “euphoria.”
Musk came into Tuesday worth close to $1.3 trillion. Then SpaceX rose another 10%.
