调查显示，The latest Fund manager survey from Bank of America shows that investors' Cash holdings have dropped to a record low, which coincides with a significant peak in risk Assets.
Bank of America stated this week that "super call" investors have reduced their cash holdings to levels typically seen before a downturn in the stock market.
The bank's latest Fund manager survey found that due to a historic high allocation to USA Stocks, Cash allocation is at a record low. The optimism ahead of Trump's second term and the Fed's ongoing interest rate cuts have driven an increase in risk appetite, prompting this rotation.
The survey showed that this month, Cash accounted for 3.9% of total Assets under management, down from 4.3%. This level constitutes a "Sell signal" that could prompt investors to reduce their exposure to Stocks.
Analysts at Bank of America, led by strategist Michael Hartnett, stated that this signal has been triggered 12 times since 2011, resulting in a 2.4% decline in the MSCI Global Index in the following month. The Index typically falls 0.7% three months after a Sell signal is issued.
In December, Cash allocation fell by 14%, marking the largest decline in five years. Bank of America noted that historically, Cash allocation has only dropped to such low levels twice, and each time corresponded with substantial peaks in risk assets.
Earlier this month, Hartnett predicted that the USA Stock market would "over-adjust" in the first quarter of next year, as investors over-allocate to assets benefiting from Trump's second term.
He further predicts that the exceptionalism of the USA market will peak in the second quarter of next year, which could herald a significant adjustment for the US stock market. Attracted by the substantial easing of financial conditions in Europe and Asia, Asset Management companies may reallocate to cheaper international Stocks.
Many other forecasters on Wall Street still expect the S&P 500 Index to rise further before 2025, but the rate of increase will slow down. The average forecast from Analysts is that this benchmark Index will increase by about 8% next year, although uncertainty surrounding some protectionist policies of Trump remains high.
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