On Tuesday, Bank of America (NYSE:BAC) shared insights from its latest Asia Fund Manager Survey, revealing a significant upgrade in the outlook for the global economy. This marks the largest post-COVID improvement in economic sentiment, indicating that a global upturn is underway. The survey highlights that only a minority of the panelists, 23%, anticipate a double-digit correction in global equities during the year.
The survey, which reflects the opinions of fund managers across Asia, also shows a strong consensus in favor of the semiconductor cycle. There is an overweight allocation recommended not just for semiconductors but for the broader technology sector as well. This sector optimism is not isolated, with energy and banking sectors also gaining traction among fund managers.
In terms of regional markets, Taiwan has overtaken India to secure the second position after Japan in the preferences of fund managers. China, on the other hand, has seen a decrease in interest. The survey also notes that the Corporate Value-Up Program in Korea, designed to enhance corporate value, has not yet influenced fund managers' market allocations significantly.
The survey’s findings suggest fund managers are keeping a watchful eye on various market indicators. They are monitoring stock-bond correlations, bond volatilities, and market breadth closely. This vigilance is to ensure they are not caught off-guard by potential market shifts, especially considering the current euphoric sentiment amidst rising bond yields.
Overall, the survey by Bank of America indicates a bullish stance on the global economy and a preference for technology stocks. It also points to a diversifying interest in other sectors like energy and banking, while showing a cautious approach towards market volatility and breadth.
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