Expectation of Federal Reserve interest rate cuts by the end of September.
Fund managers no longer consider inflation as the top risk to markets in Bank of America's July Global Fund Manager Survey.
Investors are growing optimistic about the global economy with a belief in a 'soft landing' in the next 12 months.
Market sectors like Real Estate and Industrials have seen significant gains since July 11.
The Russell 2000 index has experienced its highest five-day outperformance on record relative to the S&P 500.
Investors are growing increasingly optimistic about the global economy, with many believing that a 'soft landing' is the most likely outcome in the next 12 months. This shift in sentiment is reflected in recent market movements, as sectors such as Real Estate and Industrials have seen significant gains since July 11. The Russell 2000 index has also experienced its highest five-day outperformance on record relative to the S&P 500.
The confidence in a soft landing is not only due to the improving economic outlook but also a decrease in inflation concerns. In Bank of America's July Global Fund Manager Survey, fund managers no longer consider inflation as the top risk to markets. This shift has led to an expectation of Federal Reserve interest rate cuts by the end of September.
Despite this positive outlook, there are still risks that could impact the global economy. Geopolitical conflicts remain a concern for many investors, and persistent inflation could potentially derail the economic recovery. Additionally, some fund managers are keeping an eye on cooling AI expectations as a potential risk.
It is important to note that while these sources provide valuable insights into the current market sentiment and economic conditions, it is crucial to approach all information with skepticism. As a neutral journalist, I will ensure that my article includes all relevant facts from each source and provides an unbiased perspective on the situation.
Investors are increasingly confident that the global economy is headed for a 'soft landing'
68% of respondents in Bank of America’s July Global Fund Manager Survey believe a soft landing is the most likely outcome for the global economy in the next 12 months
Fund managers no longer consider inflation as the top risk to markets
Markets began pricing in a 100% chance of Fed rate cuts by end of September meeting
Real Estate and Industrials are market’s biggest winners since July 11, rising about 5% each
The Russell 2000 is up more than 11% in the past five trading days, including a more than 3% bounce on Tuesday alone
This is the highest five-day outperformance on record for the Russell 2000 relative to S&P 500
