It’s that time in the month when the results of the Bank of America Fund Manager Survey – which unfortunately has emerged as a contradictory exercise in intellectual masturbation, in which respondents answer what they’d like to respond, not what they are actually doing – are pored over by Wall Street, if only for a few brief minutes.
As a reminder, last August, when looking at the monthly Bank of America Fund Manager Survey, we pointed out a “paradox” in Wall Street sentiment that could only be attributed to schizophrenia (or merely another example of how central banks have broken markets): on one hand a record number of investors said that stocks are overvalued (they were correct), even as most investors admitted they – or their peers – are long tech stocks (they were also correct).
It is also the same survey which on one hand saw a record number of investors criticizing companies for buying back their stock, and on the other sees investors rushing to buy the stock of companies that buy back stock, almost as if the respondents can’t carry more than one fact in their head at a time.
In any case, after polling 171 survey participants with $455BN in AUM, what BofA’s CIO Michael Hartnett found in the August Fund Manager Survey (FMS) is that investors were most bullish on rates since 2008 as trade war concerns send recession risk to 8-year high.
Specifically, a net 43% FMS investors expect lower short-term rates & only 9% expect higher long-term rates over the next 12-months –