Global fund managers’ record-low cash holdings and high US stock allocations signal a potential market sell-off, according to a Bank of America survey. This bullish sentiment, driven by “Trump 2.0” optimism and the Fed’s rate cuts, is countered by concerns over slower deregulation and valuations in tech stocks. A decline in emerging market equity allocation further complicates the picture.
Asian stocks mostly rose on Tuesday, tracking a partial recovery in US equities, while oil prices gained. The Nikkei 225 in Japan edged up 0.3%, while the Hang Seng in Hong Kong advanced 1.6%. However, the Shanghai Composite index in mainland China slipped 0.8%. In the US, futures contracts were mixed, with the S&P 500 futures down slightly. Meanwhile, oil prices rose, with US crude benchmark gaining 16 cents and Brent crude rising 18 cents per barrel.
US equity markets have opened higher, but the gains are tempered by recent selling pressure. The Nasdaq Composite Index is currently up 0.45%, while Nvidia shares have rebounded 3.4% after a 10% drop on Friday.
