Group 1 - The core concern among fund managers has shifted from "trade war causing global recession" to "second wave of inflation" as the biggest tail risk, with 26% of managers identifying it as such, a slight decrease from August [1] - 24% of fund managers view the loss of Federal Reserve independence and dollar depreciation as the largest tail risk, while 22% cite disorderly rise in bond yields [1] - Only 12% of fund managers consider "trade war causing global recession" as the biggest risk, significantly down from 29% in August [1] Group 2 - The survey indicates that "long on the tech giants" remains the most crowded trade, with 42% of fund managers holding this view, slightly down from 45% in August [3] - Other popular trades include long on gold (25%), short on the dollar (14%), and long on cryptocurrencies (9%) [3] - The survey was conducted from September 5 to 11, involving 165 fund managers managing a total of $426 billion in assets [3] Group 3 - Recent economic indicators show signs of rising inflation in the U.S., prompting some economists to advise the Federal Reserve to avoid significant rate cuts [4] - The U.S. Consumer Price Index (CPI) rose by 0.4% month-over-month in August, exceeding market expectations of 0.3%, with a year-over-year increase of 2.9%, accelerating by 0.2 percentage points from July [4] Group 4 - The Federal Reserve began a two-day meeting on September 16, with widespread expectations for a rate cut of 25 basis points, marking the first cut in nine months [5] - Investors are particularly focused on the Fed's future policy path, with the upcoming dot plot and comments from Powell expected to provide further insights [5]

Core Viewpoint - Global stock market momentum is expected to continue in the short term, driven by a significant rebound in global economic growth expectations and bets on substantial interest rate cuts by the Federal Reserve [1][4]. Group 1: Investor Sentiment and Market Trends - Investor sentiment has reached its most optimistic level since February 2025, with cash positions among fund managers remaining low at 3.9% for the third consecutive month [1]. - The net increase in stock allocations has reached a seven-month high, indicating a shift in market risk appetite [4][8]. - Concerns over a "trade war-induced global recession" have significantly diminished, dropping from 29% in August to 12% [4]. Group 2: Economic Growth Expectations - There has been a notable improvement in global economic growth expectations, with only a net 16% of fund managers anticipating economic weakness, down from a net 41% in August [5]. - 67% of respondents expect a "soft landing," while only 10% foresee a "hard landing," a significant increase from 5% in August [5]. - 77% of fund managers anticipate a "stagflation" environment, characterized by below-trend growth and above-trend inflation [5]. Group 3: Federal Reserve Policy Expectations - Nearly half (47%) of fund managers expect the Federal Reserve to cut interest rates four times or more within the next 12 months, indicating strong expectations for monetary easing [10]. - The anticipation of a new round of easing by the Federal Reserve is a key pillar supporting current market optimism [10]. Group 4: Inflation Concerns and Risks - Despite the optimistic market sentiment, concerns about a second wave of inflation have emerged as the largest tail risk, identified by 26% of respondents [14]. - Worries about the declining independence of the Federal Reserve and potential dollar depreciation are also significant, with 24% of respondents expressing these concerns [17]. Group 5: Survey Dynamics - The survey conducted from September 5 to 11 included 165 fund managers managing a total of $426 billion in assets [18]. - 39% of respondents prefer companies to increase capital expenditures, the highest since December of the previous year, while only 27% want companies to focus on improving balance sheets, the lowest since February 2022 [22].