Investment Rating - The report indicates a "sell signal" triggered by cash levels falling to 3.9% [14][15][86] Core Insights - Investor sentiment is the most bullish since February 2025, with a significant surge in profit optimism and risk appetite over the past three months [2][17] - 59% of investors believe a recession is unlikely, a notable shift from 42% in April, with 65% expecting a soft landing [3][26][27] - The most crowded trade is "short US dollar," with a net 20% overweight on Euro, the highest since January 2005 [5][55][62] Summary by Sections Macro Insights - 42% of investors expect Q2 2025 EPS to beat consensus, while 19% anticipate disappointment [30][36] - AI is perceived to be increasing productivity by 42% of investors [32][37] - Expectations for a global recession have decreased, with only 9% expecting a hard landing [26][28] Policy Insights - The trade war is viewed as the biggest tail risk, with expected final tariff rates on the Rest of the World rising to 14% [4][49][48] - 81% of investors forecast one or two rate cuts by year-end, with only 11% expecting a rate cut at the upcoming FOMC meeting [38][44] Asset Allocation - FMS equity allocation improved to a net 2% overweight, while bond allocation remains net 4% underweight [120][121] - Investors are most overweight Eurozone equities, with a net 41% overweight, the highest in four years [63][65] - There has been a significant increase in allocation to tech stocks, with a net 14% overweight, the highest since January 2025 [68][70] Investor Sentiment - The FMS cash level has dropped to 3.9%, indicating a sell signal, with historical median losses following such signals averaging -2% [14][20][86] - Risk appetite has surged, with a net 31% of investors expecting weaker global economic growth, a significant recovery from previous months [23][92] - 68% of investors believe high-quality earnings will outperform low-quality earnings [101][103]

Taking a look at Treasury yields. Uh the tenure at 4.4% uh 2% this morning, the 2-year at 3.9%. Joining us now, Pria Misra, the fixed income portfolio manager at JP Morgan Asset Management.Pria, great to have you with us. Thanks for having um what are we seeing priced into treasuries right now. Have we seen the effects of the tax bill. Have we seen the assumption that the Fed is going to cut rates.I mean, what are we looking at. I love that question because there's so many crossurrens with with interest rat ...

Investment Rating - The report indicates a neutral investment sentiment with a Bull & Bear Indicator reading of 5.4, suggesting a balanced outlook for global equities [12][75]. Core Insights - Investor sentiment has recovered to pre-Liberation Day levels as fears of trade wars and recessions diminish, with cash levels decreasing to 4.2% from 4.8% in April [1][17]. - Expectations for global growth have improved, with a significant reversal in recession odds, dropping from 42% likelihood in April to 36% in June [2][18]. - The best-performing asset expected over the next five years is international stocks, with 54% of investors favoring them, followed by US stocks at 23% [3][50]. Summary by Sections Macro & Micro - Global growth expectations remain weak, with a net of 46% of investors expecting a weaker economy, although this is an improvement from a record 82% in April [2][22]. - The sentiment for a "soft landing" has risen to 66%, the highest since October 2024, while "hard landing" expectations have decreased to 13% [23][24]. Returns, Risks, Crowds - The most crowded trades include long gold (41%) and long Magnificent 7 (23%), with trade war recession still seen as the primary tail risk at 47% [3][54]. - A net 21% of investors expect higher long-term bond yields, the highest since August 2022 [49]. Asset Allocation - There has been a rotation towards emerging markets, energy, banks, and industrials, while reducing exposure to staples, utilities, and healthcare [4][60]. - The average cash level among investors has decreased to 4.2%, indicating a shift towards equities [17][75]. Corporate Sentiment - Investors view corporate balance sheets as the healthiest since December 2015, with a net 3% stating companies are "underleveraged" [43]. - There is a strong desire for companies to return cash to shareholders, with 32% of investors advocating for this strategy, the highest since July 2013 [46]. Sector and Regional Allocation - FMS investors are net 36% underweight US equities, while being net 34% overweight Eurozone equities [139][140]. - The allocation to banks has increased significantly, with a net 25% overweight position, reflecting a positive sentiment towards the financial sector [156].

September. Kelly. >> All right.So still looking maybe for them to lower rates in a few more months. Steve stay right there as we bring in Paul McCulley Pimco's former chief economist Paul always like to speak with you on the eve of these decisions. And so far, the preponderance of evidence has kind of been to the deflationary side of the tariff case.I mean, even what you see, apparel prices slightly lower. There's not a lot in any of the reports up until now, that point towards a lot of price hikes througho ...

Economic Indicators - UBS has identified that recession risks in the United States are increasing, with three main indicators showing concerning trends: real-world data, credit conditions, and the yield curve [1][2] - The probability of a US recession based on real-world data has risen to 46%, an increase of 12 percentage points in just one month, indicating broad-based weakness in key economic areas [4][3] - The yield curve currently suggests an 18% probability of recession, which, while lower than previous extremes, still represents a notable increase [5] Credit Conditions - UBS's credit-based model indicates a 48% probability of recession, marking the highest level since the pandemic, reflecting shifts in financial ratios and lending conditions [6] Composite Recession Risk - The composite gauge from UBS places the overall US recession risk at 37%, up from 26% in December, approaching levels historically associated with actual downturns [7] - Despite these indicators, UBS does not currently predict a recession, noting that the economy began the year on stable footing, but warns that further data deterioration could reignite recession discussions [7] Global Implications - The US consumer remains a critical driver of global demand, and any retrenchment in consumer spending or business investment could negatively impact the developed world [9] - The situation is being closely monitored, with upcoming data in May and June expected to influence market narratives significantly [10]