Long U.S. technology stocks remain the most crowded trade

2022-04-26 0 By

Financial Union (Shanghai, editor Niu Zhanlin) – According to the latest bank of America survey, fund managers have not been as bearish on technology stocks in nearly 16 years as they are now, as the market prepares for the Federal Reserve to significantly tighten monetary policy.The monthly fund managers survey was conducted between February 4 and 10 and involved 314 fund managers with $1tn in assets under management.Net overweight positions in technology stocks fell to their lowest since August 2006, the survey showed.Most respondents responded before Thursday’s US inflation data.Red-hot inflation numbers have led investors to expect the Fed to raise interest rates about seven times this year.Nervous investors have quickly scaled back their bets on growth stocks as central banks prepare to raise interest rates to tackle inflation.Growth stocks have driven the S&P 500’s rally over the past decade, while high interest rates have hit valuations of high-priced technology stocks.While being long U.S. tech stocks remains the most crowded trade, the trend has been waning and respondents’ confidence is declining, according to the survey.Strategists at Bank of America, led by Michael Hartnett, said overall equity allocations had fallen sharply, with just under a third of respondents bullish, down more than half from January.Cash, meanwhile, was chosen as the favourite asset class with a net overweight of 38 per cent.Hawkish central bank stances were seen as the biggest tail risk for the third month in a row, followed by inflation and asset bubbles, with tensions between Russia and Ukraine ranking only fifth among market risks.Investors expect the S&P 500 to fall to 3,700 before the Fed provides support.The index closed at 4,400 on Monday.Other highlights include a jump in cash levels to 5.3%, the highest level since May 2020;Only 30% of investors expect a bear market in stocks in 2022;Liquidity conditions also deteriorated to their lowest level since May 2020.Disclaimer: This article is reproduced for the purpose of conveying more information.If the source is wrong or violated your legitimate rights and interests, please contact the author with proof of ownership, we will promptly correct, delete, thank you.Email address: newmedia@xxcb.cn