Investor sentiment is the most bullish it's been since February but far from excessively optimistic, said results of Bank of America Merrill Lynch's August Global Fund Manager Survey.
Net 46% of survey respondents believe "it's a bull market" rather than a "bear market rally," up from 40% in July. Net 79% expect higher growth, the highest since December. And a net 34% of respondents expect the global economy to get "a lot stronger."
This investor optimism is driven by profits and inflation, expectation of a COVID-19 vaccine announcement early in the first quarter of 2021, and belief that the 10-year Treasury yield will be lower than 0.5% by the end of the year.
Cash levels are down to 4.6%, but in the neutral range.