BlockBeats News, August 18th. Bank of America's latest Global Fund Manager Survey shows that global fund managers' allocation to stocks has risen to the highest level in nearly five years, indicating a highly crowded market consensus. A net 56% of respondents are overweight equities, the highest level since November 2021, with cash holdings falling to a historic low of 3.5%.

Bank of America's Chief Investment Strategist Michael Hartnett pointed out that the current market has formed a highly unanimous expectation of "no macroeconomic landing, no Fed rate hike, no AI capex cut, no Democratic Party landslide victory, and no short position." He believes that the current positioning is more suitable for retreating or rotating within risk assets rather than further expanding overall risk exposure.

The survey shows that 72% of respondents expect the Fed not to raise rates before the mid-term elections in November, and 71% expect no large-scale cloud computing company to cut AI capex this year. However, the AI bubble has been identified as the biggest tail risk, with large-scale cloud computing company capex considered the most likely source of a credit event.

Meanwhile, BTIG's Chief Market Technician Jonathan Krinsky has warned that the period from August 18th to October 11th is typically one of the most challenging phases for the U.S. stock market in midterm election years. Historical data shows that since 1990, except for 2006, the S&P 500 has seen at least a 7% decline during the August to October period in every midterm election year.

The current S&P 500 has already risen over 13% year-to-date and is at a historic high, while U.S. 10-year and 30-year Treasury yields have risen to 4.7% and above 5.2%, respectively. Rising energy prices and financing costs could further pressure the stock market. Krinsky advises investors to reduce risk exposure or hedge during this historically high-risk window.