Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

What The Hell Just Made Bullish Sentiment Double?


Investor sentiment over the past several weeks has been, in a word, weird.

It’s not enough that those bullish on the market have doubled (from 21 percent to 44 percent) over the past two weeks, according to the .

Now word comes that fund managers are back in the bullish boat when it comes to the economic enigma that is China, according to the latest BofA Merrill Lynch Survey of Fund Managers.

Just a month ago, 39 percent of fund managers said they were bearish over China, as belief spread that growth was slowing and the nation would not act as the engine of global demand that many were hoping.

But what a difference a month makes.

That downbeat assessment has switched to a net 11 percent believing that the Chinese economy will grow over the next 12 months, which according to the survey’s math translates to a 30 percent change in sentiment.

Fund managers also said in large numbers that fixed income is overvalued, yet have reduced their underweight positions, the survey found.

The equity and China bulls are running.

The question is: why?