Both retail and professional investors have become more bullish in recent weeks. Allocations to stocks are rising; allocations to bonds are declining. You can't blame them for getting excited. There's good reason for exuberance: The soft landing remains the dominant investing paradigm; The Fed is cutting rates going into a soft landing ; Corporate America has become the largest buyer of U.S.
Bullish/Bearish survey Bullish 49.0% Neutral 30.4% Bearish 20.6% Source: Bullish sentiment at 49% is very high: the historic average is 37.5%. Same with professional investors. The October BofA Global Fund Manager Survey saw the biggest jump in investor optimism since June of 2020. BofA noted that fund managers were rotating into cyclical sectors and cutting exposure to defensive sectors . Those professional investors also were holding very low cash levels, going from 4.2% to 3.9% , or the lowest since February 2021.