Bullish sentiment among investors for stocks remains strong.
The latest fund manager survey from Bank of America, released on Tuesday, indicates that cash reserves have dropped to their lowest levels in 15 years as traders invest more heavily in equities.
According to 56% of respondents, “Long Magnificent 7” continues to be the most popular trade, followed by the U.S. dollar and cryptocurrencies.
However, Big Tech hasn’t been the shining star to kick off 2025.
Thus far this year, Meta (META) is the sole standout among the Magnificent Seven tech stocks, outperforming the benchmark S&P 500 (^GSPC) with a streak of 20 consecutive days of gains. Nevertheless, it’s on track to end that streak, with shares down by nearly 3% in early Tuesday trading.
As highlighted by Yahoo Finance’s Josh Schafer, the number of companies exceeding the index’s roughly 4% gain has significantly increased at the year’s start.
In terms of cross-asset performance for 2025, the BofA survey reveals that investors now regard global equities as the top-performing asset class (34%, up from 21% in January), surpassing U.S. equities (18%, down from 27%). Gold stands at 22%, with the safe-haven asset currently trading near all-time highs.
Yet, certain risks persist. Approximately 42% of survey participants identified a global trade war as the primary risk to assets this year. In addition, nearly 40% pointed to a recessionary trade war as the largest “tail risk,” ahead of inflation-driven Fed rate hikes and the possibility of an AI bubble.
