Investors drop recession bets for first time since April 2022

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Feb 6, 2024. REUTERS/Brendan McDermid/File Photo

MILAN  – Investors have cut cash levels and boosted equity allocations as they no longer expect an economic recession for the first time since April 2022, a Bank of America survey showed on Tuesday.

Global fund managers with a combined $568 billion in assets are the most bullish in two years, having cut cash to 4.2 percent from 4.8 percent and lifted global stocks allocations to a two-year high, the report showed.

The survey also showed that “long Magnificent 7” continued to be the most crowded trade followed by “short China stocks”. Tech allocation is at the highest since August 2020.

READ: Can sizzling Magnificent Seven trade keep powering US stocks in 2024?

The BofA “Bull & Bear Indicator” has reached 6.8, suggesting that “investor positioning increasingly a headwind for risk assets,” the bank said.