Boardroom Talk: Worst behind us? BoA monthly survey says US investors are ‘screaming capitulation’

It's been a brutal bear market for stocks in the USA, which houses roughly 60% of the world's investible equities. But even though US interest rates are likely to continue rising, for the first time since the market peaked 11 months ago, we can start to believe the worst will soon be behind us.

In the same way that market timers put off selling until interest rates begin rising; they also wait until 'capitulation' before starting to buy once more. This is the time when losses have been so great and the outlook so poor, that equities are written off: a time when many are convinced share prices will never recover. It looks like we're almost there now.

Results published yesterday of Bank of America's monthly sentiment survey among global fund managers "screams macro capitulation, investor capitulation, start of policy capitulation." A note published by BoA's strategists added that in the light of these findings, US stocks are likely to bottom in the first half of next year when the Fed does a pivot on interest rates.

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