"August's surge in confidence seems to be more a triumph of policy projection and potential than positive economic data. As indicated by the survey, the risk is now that inaction by policy makers would lead to a negative reaction in global markets," said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research, in a press release.
The poll also found that European equities were starting to look attractive to some investors as the percentage of managers looking to underweight the old continent fell to a net 5% this month from 18% in July. There was also evidence of a shift in what's the biggest worry for the market right now to the U.S. fiscal cliff from European's sovereign debt situation.
The theme of returning cash to shareholders remained intact with a net 43% of those polled characterizing dividends and buybacks as "the most important use of cash flow, ahead of capital spending and strengthening balance sheets." This was highest reading since November 2010 and up from a net 37 percent in July, according to B of A.
The survey also supported the notion that stocks are still waiting for a heavy surge of funds from other asset classes, noted Harnett, who also pointed out that real estate was being viewed more favorably than it has in a long while."The summer rally has caused only modest re-allocation from cash & bonds to equities and investors remain UW commodities," he said. "[T]he FMS (fund manager survey) reveals the highest exposure to REITs [real estate investment trusts] since Jan'07 as the combination of high yield and the US real estate recovery attracts asset allocation." Coincidentally, it's a 13-F reporting day, giving the retail crowd some insight into what their institutional counterparts have been up to over the past few months. Among the stocks that saw notable buying interest was Amazon.com (AMZN), which was snapped up by firms such as SAC Capital and Tremblant Capital in the second quarter. Warren Buffett and Berkshire Hathaway (BRK.A) sold a stake in Intel (INTC), added to positions in big banks Wells Fargo (WFC) and Bank of New York Mellon (BNY) and sold off significant portions of positions in United Parcel Service (UPS) and Visa (V), among other moves.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV