NEW YORK ( TheStreet) -- You'd think the mood would be more festive on Wall Street with the S&P 500 looking poised to make another run at pre-financial crisis levels but there's still some skepticism brewing within the smart money crowd.

"The promise of policy stimulus has erased fears of global recession but high cash levels, cautious equity allocations and disdain for banks suggest that investors hate being bullish and would prefer to bet on a short-term bounce in equities rather than a major inflection point in the investment cycle," wrote Michael Harnett, chief global equity strategist at Bank of America Merrill Lynch, in commentary released Tuesday about the firm's latest survey of sentiment among hedge fund managers.

The poll was conducted from Aug. 3-9 and featured a total of 232 respondents with $640 billion of assets under management. While the results showed a dramatic shift to the positive since July, the change seems to be more a reflection of how pessimistic the mood had been than anything else.

B of A said a net 15% of the 173 managers participating in the global survey said they felt the world economy would get stronger in the next 12 months. That was a 28 percentage point swing from the previous month when a net 13% were predicting further weakening across the globe and it represented the "largest leap in confidence since April to May 2009, when the world emerged from the credit crunch."

With earnings season nothing to write home about and the fiscal cliff still in play, the prospect of more central bank accommodation, both at home and abroad, has been given credit for the surge in stock since early June, and the survey's results bore this out.

Eight out of every 10 respondents expected the European Central Bank to launch a bond-buying program by the end of 2012, B of A said, while five of 10 are expecting Ben Bernanke & Co. to pop the cork on QE3 before the year is over. High expectations, of course, raise the prospect of big disappointment if these assumptions don't morph into fact.

"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.

The current market mood is likely to remain blaséfor the next few weeks as summer winds down and vacations days get used up. Bloomberg highlighted the low volume that U.S. stocks saw Monday, saying it was the slowest day in five years.

Until the New York Stock Exchange and Nasdaq can muster a few days with five billion-plus combined shares changing hands, it'll be difficult to get a bead on whether investors are really buying into this latest move, or looking to take some money off the table.

As for Wednesday's scheduled news, Cisco ( CSCO) is set to report its fiscal fourth-quarter results after the closing bell. The average estimate of analysts polled by Thomson Reuters is calling for the Dow component to post earnings of 45 cents a share in the July-ended period on revenue of $11.6 billion.

The stock has been a loser in 2012 as the networking equipment giant continues to work through a massive restructuring, most recently announcing another round of layoffs, eliminating 1300 jobs, or 2% of its workforce, in late July. Through Tuesday's close at $17.17, the shares are down 5% year-to-date and more than 19% since hitting a 52-week high of $21.30 on April 2.

The majority of Wall Street remains bullish about Cisco with 28 of the 46 analysts covering the stock at either strong buy (11) or buy (17), and the median 12-month price target at $22, implying potential upside of 28% from current levels.

Sterne Agee previewed the quarter on Tuesday, saying it expects mixed results from the company but that the stock looks favorably priced at current levels with Wall Street pricing in some concern about the outlook because of longer sales cycles and the uncertainty in Europe, which generates more than 25% of the Cisco's revenue. The firm has a buy rating and a $23 price target on the shares.

"Based on our supply chain work, we anticipate revenue to be in-line or slightly below consensus at $11.6 billion but EPS to be in-line or better at $0.46," Sterne Agee said. "For its outlook, we expect guidance to be in-line or slightly below. From our investor feedback, we believe CSCO shares have a positive bias at these levels as expectations appear fairly modest where most anticipate conservatism given macroeconomic concerns."

The firm estimates Cisco's guidance for its fiscal first quarter ending in October at in-line or slightly below the current consensus view for a profit of 46 cents a share on revenue of $11.6 billion.

"From a geographic standpoint, we are picking up relative strength in the Americas (56%) and Asia-Pacific (17%) while Europe (27%) remains unsurprisingly challenging," Sterne Agee said. "In terms of industry verticals, our feedback suggests healthier trends in SMB (~20%) and service providers (~11%), mixed trends in enterprise (~50%), and weakness in government (~15%). As we have said before, we are hearing that customers are not necessarily canceling projects but scaling back and/or pushing them out. CSCO appears to be doing relatively better than its competitors, taking share, namely because the company has a fresher product line that saw updates in its routing, switching, security, and wireless units."

The current low expectations for the company could translate into heavy appreciation for shareholders, the firm said.

"At this point, we believe downside risk on CSCO shares is limited as investor expectations appear fairly modest," Sterne Agee said. Moreover, we believe carrier spending will pick up in the 2H and beyond driven by 4G LTE. We continue to believe CSCO is an underappreciated turnaround story similar to what we have seen with AAPL, IBM, and EMC in the past. We find its valuation attractive trading at 8.5x our CY13 EPS (6x ex. net cash) and see upside to $23 based on what we think is a reasonable and conservative 8.5x multiple on our CY13 EPS plus $6 in net cash."

Check out TheStreet's quote page for Cisco for year-to-date share performance, analyst ratings, earnings estimates and much more.

Target ( TGT) also reports on Wednesday, and Wall Street is looking for earnings of $1.01 a share in the July-ended quarter on revenue of $16.75 billion. The company has fared well on earnings day of late, beating the consensus view in five straight quarters with an average upside surprise of more than 5% over that span.

Consumers have responded favorably to a shift in Target's product offerings as the company has added grocery sections to many locations in order to compete better with Wal-Mart ( WMT).

Shares of the Minneapolis-based Target have jumped more than 20% in 2012, pushing the stock's forward price-to-earnings ratio to 12.97X vs. a multiple of 13.55X for the S&P 500 as of Friday's close.

Other companies reporting on Wednesday include Abercrombie & Fitch ( ANF), Agilent Technologies ( A), Applied Materials ( AMAT), Citi Trends ( CTRN), Deere ( DE), Hot Topic ( HOTT), Limited Brands ( LTD), NetApp ( NTAP), Petsmart ( PETM), SINA Corp. ( SINA), and Staples ( SPLS).

Wednesday's economic calendar is busy with the Mortgage Bankers Association's weekly mortgage application activity index at 7 a.m. ET; the consumer price index for July at 8:30 a.m. ET; the Empire State Manufacturing survey for August at 8:30 a.m. ET; industrial production and capacity utilization for July at 9:15 a.m. ET; the National Association of Home Builders housing market index for August at 10 a.m. ET, and weekly crude inventories at 10:30 a.m. ET.

And finally, JDS Uniphase ( JDSU) was surging in late trades after the optical networker reported non-GAAP earnings of $35.3 million, or 15 cents a share, on revenue of $439.3 million for its fiscal fourth quarter, beating the average estimate of analysts polled by Thomson Reuters for a profit of 12 cents a share in the June-ended period on revenue of $422.6 million.

The company also forecast non-GAAP revenue of $415 million to $435 million for its fiscal first quarter ending in September, surrounding the current consensus view of $427.1 million. The stock was last quoted at $11.11, up 4.6%, on after-hours volume of 1.74 million, according to Nasdaq.com.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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