Global Fund Manager Survey: Racing the Frontier

Bottom Line: Sept BofA Global FMS shows investor conviction on macro boom & fast-paced AI capex still strong; but risks of disorderly bonds and DEM midterm sweep rising; FMS cash jumps from 3.5% to 3.9% as excess bullishness, which stymied summer risk upside, now fading…when cash back in 4-5% neutral zone, safe to increase risk exposure. On Macro & Profits: net 8% predict acceleration of already-strong global growth; 55% predict "no landing" for economy, 38% "soft," 2% "hard"; most investors since Aug'21 predicting double-digit EPS growth next 12 months; investors macro/EPS bulls, sole worry is companies over-investing (record net 33% say so). On Policy & Politics: Fed seen as behind-curve…first time since Sep'22 investors expect flatter yield curve; just 16% of investors say Bessent bond buybacks will reduce Treasury yields; most likely midterm result seen as DEM House/GOP Senate (44%) but DEM sweep odds rising (31%);