Investor Greed Surges as Bullish Sentiment Hits 5-Month High: BofA Survey

Investor sentiment has reached its most bullish level since February, according to Bank of America’s latest Global Fund Manager Survey, with optimism being driven by expectations of rising corporate profits and renewed risk appetite.

Key Takeaways:

Overweight stock positions are increasing, but BofA notes they aren’t yet at "extreme" levels.

Cash levels dropped to 3.9%, triggering an internal BofA "sell signal."

The S&P 500 has climbed over 6% YTD, recovering from early April’s slump caused by Trump’s “Liberation Day” tariff threats.

59% of surveyed fund managers now believe a recession is unlikely, a sharp improvement from April’s 42%.

BofA believes investors will prefer “hedging and sector rotation” this summer rather than big risk-off plays, as “greed is harder to reverse than fear.”

Trade Risks and Fed Uncertainty Linger While optimism is surging, macro risks persist:

President Trump has warned several trading partners of steep tariffs due by early August, raising fresh uncertainty.

The Federal Reserve’s next move remains murky, particularly amid Trump’s repeated attacks on Chair Jerome Powell.

Economists caution that prolonged tariff tensions could fuel inflation and delay interest rate cuts.

Market Metrics to Watch: You can explore real-time investor sentiment shifts and macro risk indicators using these resources:

📊 Earnings Calendar API: Track major S&P 500 reports impacting sentiment.

📈 Key Metrics (TTM) API: Analyze valuation and profitability trends across companies fueling bullish sentiment.

Outlook: Investor sentiment is strong, but with global tariffs looming and Fed policy uncertain, markets may remain sensitive to policy shocks. The next few weeks of earnings and geopolitical developments will be critical in sustaining this bullish trend.