YEREVAN (CoinChapter.com) — Global investors are set to put money into record-high stock markets, according to a survey by Bank of America Corp. In response to a question about which asset class would benefit most from reallocating money-market funds, 32% of respondents chose US stocks. Another 19% preferred global equities, while 25% opted for government bonds.
The survey, conducted from June 7 to 13, gathered responses from 206 participants managing $640 billion in assets. Results showed investors are the most optimistic since November 2021, with cash levels in money-market funds at a three-year low. Currently, cash funds hold about $6.1 trillion, according to Bloomberg data.
Tech Stocks Lead as US Markets Reach Record Highs
Long positions on major technology companies, known as the Magnificent Seven, including Microsoft Corp. and Nvidia Corp., have surged to 69%, marking one of the most crowded trades in history, according to the survey.
US stocks have reached all-time highs, driven by excitement around artificial intelligence and hopes that easing inflation will prompt the Federal Reserve to cut interest rates this year. A 15% rally in the S&P 500 this year has pushed the benchmark’s forward 12-month price-to-earnings ratio to 21. This is above the long-term average of 16, Bloomberg data shows.
Wall Street Strategists Optimistic on S&P 500 as Big Tech Fuels Gains
Despite high valuations, several Wall Street strategists remain optimistic about the S&P 500’s outlook. Firms like Citigroup Inc. and Goldman Sachs Group Inc. have expressed positive views, foreseeing further growth in large-cap growth stocks. Interestingly, the Bank of America poll showed 41% of fund managers expect these stocks to continue driving the US market rally.
Moreover, big tech has been a significant contributor to the S&P 500’s gains this year, with Nvidia alone accounting for 34% of the index’s rally.
Notably, the optimistic sentiment among investors is supported by a substantial reduction in cash levels within money-market funds. This indicates confidence in the stock market’s potential for continued growth.
Key Numbers and Insights
- 32% of investors prefer US stocks for cash reallocation.
- 19% would choose global equities.
- 25% favor government bonds.
- Cash funds hold about $6.1 trillion, a three-year low.
- 69% of investors have long positions in major tech companies.
- S&P 500’s forward 12-month price-to-earnings ratio is 21.
Above all, the detailed insights from the Bank of America survey provide a clear picture of investor sentiment and the factors influencing their decisions.
