Global fund managers executed the largest one-month increase in stock allocations on record in May, dumping cash to chase equities despite a brutal parallel rout in the global bond market.
The Key Numbers (BofA Survey Data):
- The Scale: BofA polled 200 institutional allocators managing a combined $517 billion (conducted May 8–14, 2026).
- The Stock Surge: A net 50% of fund managers are now overweight equities, a massive leap from 13% in April—the largest single-month jump in survey history.
- Cash Drawdown: Average cash levels dropped to 3.9% (down from 4.3%), signaling capital capitulation into the stock market.
- The Macro Outlook: 39% of managers predict a “no-landing” scenario (strong growth, persistent inflation), while only 4% fear a sudden economic “hard landing.”
The Geopolitical & Yield Disconnect:
- Hormuz & Oil: Despite crude oil sitting stubbornly above $100/barrel and U.S.-Iran peace talks gridlocked, 66% of respondents expect the Strait of Hormuz bottleneck to clear within the next few months.
- The Yield Targets: Reflecting severe structural anxiety over fixed income, 62% of respondents expect 30-year U.S. Treasury yields to climb to 6% (up from the current ~5.14%). Only 20% target a drop to 4%.
- The Main Risk: A net 40% of managers cited a secondary wave of inflation as the market’s single biggest “tail risk.”
The Bottom Line: Driven by the AI spending boom and strong corporate earnings, Wall Street is aggressively overweighting stocks at record valuations, gambling that corporate earnings power can outrun a tightening macroeconomic vise and looming 6% bond yields.
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