Bank of America reported a decrease in "apocalyptic" market sentiment.
Investors are rushing back into stocks and bonds. History predicts a strong growth in the US stock market in the coming year, according to Bloomberg.
The results of the monthly survey of managers of large funds in August showed an improvement in market sentiment, Bank of America (BofA) reported. Investor sentiment is still negative, but not as "apocalyptic" as a month ago, writes RBC.
Investors are rushing back into stocks and bonds amid speculation that inflation in the US has peaked, and the Fed will soon enough complete the cycle of raising rates to keep the US economy from recession, according to BofA.
The previous July survey showed record pessimism: investors' investments in stocks fell to the levels of the 2008 financial crisis.
A new survey has shown that expectations have increased among professional investors that the shocks of inflation and rate hikes will end in the next few quarters.
In August, investors' interest returned to American stocks, securities of technology and consumer companies. At the same time, investors were selling stocks from the protective sectors and securities of manufacturers of consumer goods.
The main risk for the markets, according to professional investors, remains stable elevated inflation. In second place is the risk of a global recession, followed by aggressive actions by central banks to raise rates.
After two months of growth, more than 90% of the components of the S&P 500 index are trading above their 50-day moving averages. From the point of view of history, this is a great sign for the US stock market, writes Bloomberg.
Since 2003, there have been 11 such episodes, after which the S&P 500 grew by an average of 5.7% and 18% in the next three and twelve months, respectively. The growth of the index occurred in 10 out of 11 cases, which indicates a very high reliability of this signal.