© Reuters.
Investing.com – Investors’ allocation to bonds has reached its highest level since March 2009, according to Bank of America’s (NYSE:) monthly survey of global fund managers (FMS).
The survey, which included 225 participants managing $553 billion in assets, revealed a noticeable shift in investor sentiment.
“FMS investors remain cautious on macroeconomics but are turning bullish on prices; investors’ playbook for 2024 depends on a soft landing, lower interest rates, US weakness, and the continuation of Big Tech and the pharmaceutical revolution,” the analysts wrote in a report.
Cash levels were reduced to 4.7%, with allocations to both bonds and stocks increased. Bond allocation, in particular, saw a significant increase of 18 percentage points month-on-month, bringing the net overweight to 19% – the highest allocation in nearly 15 years.
This shift in allocation coincides with 76% of respondents believing the Fed’s raising cycle is over, and 61% expecting bond yields to decline.
Moreover, 94% of investors expect bonds, stocks and commodities to outperform cash in the next year.
The equity allocation also shifted net overweight for the first time since April 2022, changing from 4% net overweight last month to 2% net overweight in November. This shift is due to stable macro expectations and a more optimistic outlook on interest rates.
Despite the positive news that pushed the rally yesterday with better than expected inflation data, all traders should be wary of the strength of the bond market as the relationship between bonds and gold is inverse. Gold also stands at critical levels now, as shown in the attached image
2023-11-15 15:57:00
#Urgent #Danger #lurks #gold #rise. #Pay #attention #Investing.com
