BofA May Global Fund Manager Survey says investors are bearish, Fed done, risk assets are resilient so long as the landing is soft.

CASH: BofA reports FMS cash levels at 5.6%, allocation to bonds is at a 14-year high, allocation to commodities is at a 3-year low.
GROWTH: BofA says global growth expectations are the worst in 2023, but majority of those surveyed are in soft-landing camp rather than a hard landing, or no landing (4%); BofA says this is corroborated by investors forecasting a tiny 1% drop in global EPS in next 12 months.
FED: The survey shows most think the Fed's hiking cycle over, and the first Fed rate cut is likely to be seen in January 2024. These expectations mean that forecasts for a steeper yield curve are now at a 2-year high.
RISKS: Survey participants see the biggest tail risks as: credit crunch/recession, high inflation/hawkish central banks, while CRE seen as most likely source of credit event.
DEBT CEILING: The vast majority of investors expect US debt ceiling resolution before “X-date.”
ASSET ALLOCATION: Allocation to stocks is creeping higher, and is now at a 5-month high; BofA notes a big rotation out of commodities, and into tech stocks (which is now at the highest since December 2021) as well as the Eurozone.
STYLES: Investors are the most long of growth stocks vs its value counterpart since July 2020.
CROWDED TRADES: The most crowded trades are seen as long big tech, short banks, short USD.
CONTRARIAN TRADES: Long REITs, banks and value stocks; short bonds, tech and growth.