Bank of America survey: Profit optimism increasing, investor confidence index rises to five-month high

The Bank of America's global fund manager survey for July showed that investor sentiment is currently at its most optimistic level since February, thanks to the largest increase in expectations for corporate profits since July 2020. The survey indicated that the investor confidence index reached a five-month high, rising from 3.3 to 4.3 in just one month, reaching its highest level since February 2025. This index covers growth expectations, cash levels, and stock allocations. The investor confidence index reached a five-month high. The survey also showed that a net 11% of respondents expect global corporate profits to decrease in the next 12 months. This proportion has improved compared to 26% in June and 90% in April, marking the most significant three-month improvement since August 2020. However, cash levels have decreased from 4.2% last month to 3.9% in July, triggering a "sell" signal. Furthermore, investors' risk appetite has seen the largest increase in nearly three months, with around 40% of fund managers taking risks above normal levels. Investors' risk appetite has increased significantly. The Bank of America survey defines risk appetite as the continuous outperformance of US stocks over global economic growth expectations. This month, a net 31% of respondents expect global economic growth to slow down, an improvement from 46% in June and 82% in April. Currently, the S&P 500 index has risen by 10.9% compared to a year ago.