Combined exposure to equities and commodities hit the highest since February 2022
by Sagarika Jaisinghani
Money managers are set to ring in the new year with resounding confidence about everything from economic growth to equities and commodities, according to a monthly poll by Bank of America Corp.
Investor sentiment as measured by cash levels, stock allocation and global growth expectations rose to 7.4 in December on a scale capped at 10, the most bullish survey outcome in four-and-a-half years.
Combined exposure to equities and commodities — assets that typically perform well when the economy is expanding — hit the highest since February 2022, just before a Covid-driven inflation shock led to a sharp rise in global interest rates.
BofA strategist Michael Hartnett said this level of optimism has been seen only eight times this century. Those periods include November 2010 to February 2011, during the recovery from the global financial crisis, and the post-Covid boom between November 2020 and July 2021.
The MSCI All-Country World Index has rallied nearly 20% in 2025, notching a third straight year of double-digit gains, as global central banks lowered interest rates alongside robust growth. While there are concerns about a potential technology bubble in the US, confidence in a resilient economy has lifted major stock benchmarks back near record highs.
An informal Bloomberg survey of US, European and Asian asset managers showed they’re positioned for even more equity strength in 2026. Market forecasters share that optimism, with banks including Morgan Stanley, Deutsche Bank AG and Citigroup Inc. predicting a rally of more than 10% in US stocks.
BofA’s survey showed about 57% of participants expect a soft economic landing, while only 3% predict a hard landing, the lowest level in two-and-a-half years. Cash levels fell to a record low of 3.3% from 3.7% the previous month.
There are lingering concerns about US tech valuations, with an artificial intelligence bubble still viewed as the biggest tail risk. A net 14% of participants continue to believe that companies are spending too much on capital expenditure, although that’s lower than a record 20% last month.
The survey was conducted between Dec. 5 and Dec. 11, and canvassed 203 participants with $569 billion in assets.
Copyright Bloomberg News
