Global FMS Macro Indicator[[The BofAML Global FMS Macro Indicator is a year-on-year measure of investor inflation expectations, capex demand, risk appetite, sector positioning and equity vs. bond positioning.]] flips to neutral territory after flashing a buy signal last month.<\/p>\n
While FMS Macro conditions continue trending higher, investors have already begun deploying cash; cash levels drop to 4.8% in March from 4.9% in February, but are still higher than the 10-year average of 4.5%.<\/p>\n
A record number of investors (net 34%) find equities to be overvalued, the most in 17 years; the US is identified as the most overvalued region (net 81%), while EM equities (net 44%) and Eurozone equities (net 23%) are seen as undervalued.<\/p>\n
Investors identify higher interest rates (36%) rather than weaker earnings (21%) as the catalyst most likely to end the 8-year bull market in equities; fear of protectionism (21%) falls sharply from last month\u2019s survey.<\/p>\n
Yields remain too low to hurt stocks: 67% of fund managers surveyed say 10-year Treasury yields of 3.5%-4% are needed for an equity bear market.<\/p>\n
Fund managers cite European elections raising disintegration risk as the biggest tail risk (33%), closely followed by a trade war (20%) and a crash in global bond markets (18%).<\/p>\n
A net 32% of investors think the US dollar is overvalued, the highest proportion since June 2006 ; Long USD is once again seen as the most crowded trade (39%).<\/p>\n
Expectations for faster global growth remain high at net 58%; expectations for Chinese growth jump to 11%, the highest level since 2013.<\/p>\n
Secular stagnation expectations (below-trend growth and inflation) fall to 5 \u00bd year lows (34%).<\/p>\n
57% of investors surveyed say global profits will improve over the next 12 months, up from February (55%) and near a 7-year high.<\/p>\n
Just 10% of investors surveyed expect Congress to pass a tax reform bill before its summer recess begins in August.<\/p>\n
\u201cInvestor positioning argues for a risk rally pause in March\/April, with allocation to equities at a two-year high and bond allocation at a three-year low,\u201d<\/em> said Michael Hartnett, chief investment strategist. \u201cPolicy is the key catalyst for the Icarus trade to fly higher in the coming months.\u201d<\/em> A record number of investors (net 34%) find equities to be overvalued, the most in 17 years; the US is identified as the most overvalued region (net 81%), while EM equities (net 44%) and Eurozone equities (net 23%) are seen as undervalued<\/p>\n","protected":false},"author":20,"featured_media":61724,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1481],"tags":[1809,1655,1657,1651,1437,1724,2091],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/61726"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=61726"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/61726\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/61724"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=61726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=61726"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=61726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nRonan Carr, European equity strategist, added: \u201cInvestors are positive on European macro and see more value in equities than in the US, but there is a risk of complacency on French elections.\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"