Bank of America's October Fund Manager Survey showed that fund managers' optimism fell to its lowest level since June, although investors remain relatively positive about the macroeconomic outlook and financial markets.
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According to surveyed fund managers, the biggest tail risk facing financial markets is a disorderly rise in bond yields, followed by the risk of an AI-related speculative bubble bursting.
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Pessimism regarding bond yields is at its lowest level since May 2025. On a net basis, just 1% of respondents expect long-term interest rates to rise.
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Surveyed investors indicated that a rise in the 10-year US Treasury yield to 5.9% would prompt them to shift capital from equities into bonds.
Meanwhile, the US NFIB Small Business Optimism Index declined to 97.9 points, compared with expectations of 98.2 and the previous reading of 98.7. The data suggest a moderate deterioration in sentiment among US small businesses, with the reading coming in slightly below forecasts. S&P 500 futures (US500) are holding on to recent gains and are trading near the 7,900-point level.
Source: XTB
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