MILAN/LONDON, Sept 17 (Askume) – Global investor sentiment rose in September for the first time since June on optimism about interest rate cuts and a dovish stance from the Federal Reserve, a Bank of America fund manager survey showed on Tuesday.
The survey showed that cash allocation fell by 4.2% as investors shifted from cyclical assets to bond-sensitive assets, pushing overinvestment in utilities to the highest level since 2008. Meanwhile, investment in commodities fell to a seven-year low.
Bank of America said the survey described investors as “nervous bulls.”
Signs of a slowdown in the US labor market and a deterioration in other economic parameters have prompted traders to bet on an unusually sharp rate cut at this week’s Federal Reserve policy meeting.
Stocks hit record highs and bond prices soared as investors looked for relief from years of rising interest rates.
“52% of investors surveyed by fund managers believe there will be no recession in the US economy in the next 18 months,” the bank said.
The survey, covering the period September 6-12, interviewed 243 panelists and looked at assets managed by $666 billion. Six in 10 respondents believe interest rates are too restrictive, reaching the highest level in 16 years.
