The Stock Market Melt Up Is Over With Cash Levels At Two Year Highs

Image: Dan Kitwood / Getty.

Bank of America Merrill Lynch today released its latest global fund manager survey which showed that, “rising geo-political temperatures combined with the threat of rising U.S. interest rates have led global investors to scale back risk and take cash levels to two-year highs”.

Fund Managers who are overweight with cash leapt to 27% in August from just 12% in July. At the same time managers who are overweight in equities fell heavily to 44% from 61% last month.

Attitudes to Europe have deteriorated while those toward emerging markets and Japan have seen allocations to these sectors increase.

Overall there is a warning in the survey from BofA Merrill Lynch Research chief investment strategist, Michael Hartnett said, “The market melt-up is over, or at least on pause, as investors seek refuge while they digest world events and the prospect of higher rates”.

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