Cash levels are rising, the latest sign that investors aren’t wildly enthusiastic about stocks after a rally since mid-February.
Average cash balances rose to 5.4% from 5.1% in March, just below the 15-year high of 5.6% hit in February, according to Bank of America Merrill Lynch’s fund-manager survey for April. While a cash balance rising above 4.5% is typically a contrarian signal to buy stocks, the bank’s strategists note that it is only “superficially bullish” this time around. The combination of elevated cash levels and high valuations likely mean stocks and other risk assets will remain in a trading range, the analysts add.
The report is based on responses from 200 participants who were surveyed between April 1 and April 7.
Read the Full Article: Source – Wall Street Journal
Time For Truth: (Wall Street Journal) – Investors Stockpile Cash, In Latest Hint that All’s Not Well for Stocks