Overview
- Average cash held by global fund managers fell to 3.7%, a level BofA says has historically preceded stock declines and Treasury outperformance over the next one to three months.
- Strategist Michael Hartnett warned that markets are likely to correct further without a December rate cut, with current positioning now a headwind for risk assets.
- Investor exposure to equities is the highest since February, even as derivatives pricing shows reduced odds of a Federal Reserve cut next month.
- Respondents identified a potential AI bubble as the biggest tail risk and, for the first time in two decades, described companies as overinvesting.
- Allocations to UK equities saw the sharpest three‑month drop since October 2022 on concerns over the economic outlook and potential budget measures.