Homepage / Investment / Stock market peak still at least a year away, fund managers say in Bank of America survey
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Investment

Stock market peak still at least a year away, fund managers say in Bank of America survey

Professional investors are going all-in on the raging bull market, reducing cash allocations to the lowest level in five years and putting the most money in stocks in two years.

As the market looks to continue its best-ever start to a year, respondents to the January Bank of America Merrill Lynch Fund Manager Survey are showing that optimism has not dimmed, even after 2017’s big 20 percent gain. Stocks were looking at another strong performance Tuesday, judging by early trading action.

Hedge fund managers say their own equity exposure — 49 percent net long — is at the highest since 2006 as the level dedicated to hedging strategies against a possible market downturn falls to its lowest since 2013.

“Investors continue to favor equities,” Michael Hartnett, BofAML’s chief investment strategist, said in a statement. “By the end of Q1, we expect peak positioning to combine with peak profits and policy to create a spike in volatility.”

Hartnett is far from alone in his forecast for a volatility spike. Most Wall Street strategists issued the same call in their 2018 outlooks, and in fact have been anticipating that the market’s smooth ride higher over the past year would come to an end any day now.

However, that’s not been the case.

The CBOE Volatility Index, a popular measure for investor fear, was last above 20 — its long-term average — in early November 2016. Since then, it’s been mostly all oars in the water as even retail investors seem intent on getting into the action.

In 2018 alone, exchange-traded funds have raked in more than $16.5 billion in fresh cash, according to FactSet. Coming in barely two weeks’ time, that’s well ahead of the $6.5 billion a month pace over the past 12 months.

Pros responding to the BofAML survey say they remain unfazed by the market surge and don’t see the top coming until sometime in 2019.

That optimism is fueled largely by hopes for global growth, with a net 47 percent saying they expect the economy to be stronger over the next 12 months, a 16 percentage point gain from December.

They see far greater risks in the bond market, which they rate the top “tail risk” while at the same time rating bets against volatility to be the most crowded trade. In fact, the level of managers overweight stocks compared to government bonds is at its highest level since 2014.

Investors rate inflation or a bond crash as the biggest market danger for 2018, replacing fears of a policy mistake by the Fed or the European Central Bank. Fears of protectionist policies, spurred by some of President Donald Trump‘s rhetoric, have diminished to 63 percent of those surveyed, though that’s up from the long-term average of 45 percent.

In sector allocations, managers say they’re moving out of telecom and into tech, industrials and emerging markets. The iShares Core MSCI Emerging Markets fund has pulled in $1.3 billion in creations for 2018, the third-most of any ETF.

The high optimism among fund managers correlates with other investor surveys.

The American Association of Individual Investors saw bullishness take a dip over the past week, but those expecting gains over the next six months outnumber those who think the market will fall by a 48.7 percent to 25.1 percent. The spread is even wider in the Investors Intelligence count of market newsletter authors, with the bull-bear spread at 64.4 percent to 13.5 percent, the biggest gap since April 1986.

WATCH: Why the bull may be running out steam.

Source: Investment Cnbc
Stock market peak still at least a year away, fund managers say in Bank of America survey

Comments are closed.