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Great optimism on the stock markets: Fed Chairman Powell is causing euphoria among major investors
According to a report from finanzmarktwelt.de, the stock markets have been euphoric since Fed Chairman Jerome Powell announced interest rate cuts - this is now also shown by Bank of America's survey of major investors. Optimism over Federal Reserve interest rate cuts has led investors to increase their exposure to U.S. stocks to their highest level in more than two years. The Bank of America Corp. survey among fund managers revealed that optimism about rate cuts is “at record high”. Most respondents believe the stock market is the best way to take advantage of the Fed's rate-cutting cycle. The results of the survey are consistent with…
Great optimism on the stock markets: Fed Chairman Powell is causing euphoria among major investors
According to a report by finanzmarktwelt.de,
Since Fed Chairman Jerome Powell announced interest rate cuts, the stock markets have been euphoric - this is now also shown by the Bank of America survey of major investors. Optimism over Federal Reserve interest rate cuts has led investors to increase their exposure to U.S. stocks to their highest level in more than two years. The Bank of America Corp. survey among fund managers revealed that optimism about rate cuts is “at record high”. Most respondents believe the stock market is the best way to take advantage of the Fed's rate-cutting cycle.
The survey results are in line with the rally in US stock markets over the past two months, which has brought the benchmark S&P 500 index near an all-time high. Investors are now fixated on economic data to see when rate cuts will begin, with some betting the first cut will come as early as March. However, despite the optimism, US stock futures fell in the spot market on Tuesday after a long weekend, mainly due to geopolitical risks and hawkish statements from ECB members.
The survey also showed that market participants continue to invest large sums in money market funds, with cash holdings at 4.8% in January. Last year, a record $1.2 trillion flowed into cash funds, far exceeding the amount flowing into global stock markets - meaning many investors missed out on the rally. Based on the survey results, the most commonly traded trades currently are long positions in the Magnificent Seven group, which includes Apple Inc., as well as short positions in Chinese stocks and long positions in Japanese stocks.
These developments show that investor optimism in the stock markets is currently very high, but there is also a risk that geopolitical risks and hawkish statements could influence prices. Investors should therefore remain vigilant and follow developments closely.
Read the source article at finanzmarktwelt.de