Investors are bullish on global stocks and short on everything else, with their cash levels at the lowest since 2010, according to a Bank of America (BAC) survey of fund managers. That said, 89% said U.S. equities are overvalued.
The benchmark S&P 500 index gained 0.2% Tuesdayand has risen 4.2% so far in 2025. MSCI’s (MSCI) ACWI, a global equities measure, rose 0.27% on Tuesday and has advanced 5.5% this year.
Fear of a global recession is at a three-year low, with 52% expecting a soft landing, 36% projecting no landing and just 6% anticipating a hard landing, analysts led by Michael Hartnett wrote in a note. Investors are also more optimistic about China’s economic growth.
The respondents view a possible trade war as only a tail risk, with 58% saying gold will be the best performing-performing asset in that event, followed by the U.S. dollar at 15% and 30-year Treasuries at 9%.
On U.S. interest rates, 77% expect the Federal Reserve to cut at least once this year. Just 1% expect the central bank to hike its benchmark.