Bank of America(US:BAC) Zhi Tong Cai Jing·2025-12-16 13:20Core Viewpoint - The recent survey by Bank of America indicates a significant rise in optimism among fund managers, with macroeconomic confidence reaching its highest level since August 2021, while cash holdings have dropped to a record low of 3.3%, highlighting potential risks from AI bubbles and private credit [1] Group 1: Macroeconomic Outlook - 57% of fund managers anticipate a "soft landing" for the global economy, characterized by moderate growth and controlled inflation, while 37% expect continued strong growth, and only 3% are concerned about a "hard landing" [2] - Global growth expectations have risen to a four-year high, with corporate earnings expectations also reaching their peak since August 2021, as 41% of respondents believe that corporate earnings in the Asia-Pacific region will strengthen [2] Group 2: Liquidity Environment - The liquidity environment is assessed as the best since September 2021, with 69% of investors betting on Kevin Hassett to become the next Federal Reserve Chair [3] Group 3: Risks and Crowded Trades - Despite the optimism, 37% of respondents identify potential risks from an "AI bubble" [4] - 40% of respondents see a risk of a credit crisis, with private credit being the largest source of systemic credit events [5] - The most crowded trades include 54% of investors going long on the "Wall Street Seven" and 29% on gold, indicating the most popular investment directions [6] Group 4: Asset Allocation - Fund managers are undergoing aggressive asset reallocation, with cash holdings plummeting to a historical low of 3.3%, approaching a "sell signal" as per Bank of America's cash rule [6] - Net overweights include stocks at 42%, the highest since December 2024, and commodities at 18%, the highest since September 2022 [7] - Net underweights include bonds at 29%, the lowest since October 2022, and significant underweights in cash, consumer staples, and energy stocks [8] Group 5: Sector Preferences - Top three sectors with net overweights are healthcare at 35%, banks at 32%, and technology at 21%, with technology stock allocations reaching their highest since July 2024 [8] - The bottom three sectors with net underweights are energy at 26%, consumer staples at 20%, and consumer discretionary at 16% [8] - Japan remains the most favored market with a net overweight of 41%, while India has a moderate overweight of 10% [8] - Expectations for the semiconductor cycle have rebounded to the highest level since July 2024, with 55% of respondents believing the semiconductor industry will strengthen in the next 12 months [8]