NEW YORK, March 18 — Wall Street stormed back this week after absorbing a long-awaited rate hike from the Federal Reserve, leaving investors to determine whether stocks are set for a sustained rebound or more turbulence.
Still, some big banks believe the worst may be over, for now. Strategists at UBS Global Wealth Management yesterday said the projected pace of Fed tightening is “consistent with rising stocks” and advised clients to remain invested in equities. Stubborn inflation, sky-high commodity prices and few signs of an end to the war in Ukraine further cloud the picture for investors, said Rick Meckler, a partner at Cherry Lane Investments.
Fund managers’ allocation to cash stand at their highest levels since April 2020, according to BofA Global Research’s monthly survey. Bearish sentiment among retail investors is close to 50 per cent, the latest survey from the American Association of Individual Investors showed, well above the historic average of 30.5 per cent.
Cresset Capital Management is recommending that clients underweight equities and raise their exposure to gold, which is viewed as a safe-haven asset, said Jack Ablin, Cresset’s chief investment officer.