According to Bank of America's latest monthly survey of managers around the world, everyone on Wall Street is in the seven tech giants – Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta, and Tesla.
In the survey, 61% of the surveyed** managers believe that going long on the "Seven Sisters" of U.S. stocks is currently the most crowded trade. The proportion of managers who hold this view is much higher than in the first two surveys in December and January this year. For the leader of the U.S. stock market, 41% of the managers surveyed believe that the growth of the stock market. Small-cap growth was attributed to 18% of respondents.
It's no surprise that Wall Street is vying to go long on the "Seven Sisters". Wall Street Insight mentioned earlier this month that seven technology stocks contributed 45% of the S&P 500's return in January, with the combined market capitalization of seven ** reaching 12$5 trillion, more than the GDP of big cities like New York and Tokyo. Recently, it has been pointed out that the AI concept stocks promoted by the artificial intelligence (AI) boom are still richer among the world's richest, and almost all of the rich's net worth growth this year comes from AI. Thirty of the top 500 billionaires in the Bloomberg Billionaires Index have at least some of their wealth from AI-concept companies tracked by the Bloomberg Global AI Index. Exposure to these companies has added a combined $124 billion to their net worth this year, accounting for 96% of the total wealth added by the richest people in the Bloomberg Billionaires Index this year.
The top winner of this year's personal wealth growth in the aforementioned Rich Index rankings is Mark Zuckerberg, CEO of Meta, the second-best performer of the S&P 500 this year, who has seen his personal net worth increase by $37.1 billion since the beginning of the year due to the concept of AI. He was followed by Jensen Huang, the CEO of AI chip giant Nvidia, whose AI-related fortune has increased by $19.6 billion this year.
In its last survey report in January, the BofA team, led by Michael Hartnett, chief investment strategist at BofA Global Research, wrote that "optimism about the Fed cutting interest rates is at record levels." Optimism about a rate cut prompted investors to increase their exposure to U.S. equities to the highest level in more than two years, with 79% of respondents expecting a soft or no global economic landing this year, the survey showed. The majority of respondents believe that ** is the best way to deal with a cycle of interest rate cuts. In this survey, optimistic expectations of interest rate cuts remain high. Sixty-two percent of managers** expect long-term Treasury yields to fall, only 4% expect short-term interest rates to rise, 7% expect inflation to climb and 85% expect the Treasury yield curve to steepen.
In the survey, the most bullish sentiment among the survey** managers was the highest in two years, while their optimism about global economic growth was the highest in two years. Their cash share increased from 4 in the last survey8% to 42%。
Moreover, managers no longer expect a global recession in the next 12 months, the first time since April 2022 that there has been no recession in the BofA survey. When asked about the direction of the U.S. economy this year, two-thirds of respondents expect a soft landing, one in five expect no landing, and one in 10 expect a hard landing.
At the same time, 46% of the surveyed** managers believe that fiscal policy has been overstimulated in the past, the highest proportion since the previous Bank of America survey. BofA's Financial Market Stability Risk Indicator has increased from 30% to 19%。