While traders are making bank chasing Apple to a $3 trillion market cap, many in the market are adding cash to their accounts amid heightened concerns around the Omicron variant and a more hawkish Federal Reserve.<\/p>\n
Bank of America's monthly fund manager survey out Tuesday found cash allocation among investors surged 14 percentage points in December from November. Fund managers were net 36% overweight cash, the highest allocation to the asset class since May 2020.<\/p>\n
Besides cash, investors also rotated into defensive sectors of the market such as health care and REITs.<\/p>\n
\"Hawkish central banks spark a surge in cash and more defensive asset allocation,\" explains BofA strategist Michael Hartnett.<\/p>\n
Bullish...cash?<\/p>\n
The cash bulls could unwind, Hartnett hints, if the Fed is a little less hawkish on policy at its meeting this week.<\/p>\n
\"If December FOMC [meeting] is dovish, crypto, unprofitable tech, banks, EM would rally if hawkish, cash stays cash,\" Hartnett adds.<\/p>\n
Decreased investor appetite for risk-taking right now and more appetite to raise cash could be seen in the yawning bearishness in meme stocks.<\/p>\n
Shares of GameStop and AMC dropped 4% and 6%, respectively, in pre-market trading Tuesday. On Monday, AMC's stock crashed 15% while GameStop tanked 13%.<\/p>\n
Both popular meme stocks are down more than 60% from their highs achieved earlier in the year, when owning cash wasn't exactly in favor.<\/p>\n
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.<\/p>\n
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Omicron variant and threat of higher interest rates cause investors to hoard cash: BofA - Yahoo Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" While traders are making bank chasing Apple to a $3 trillion market cap, many in the market are adding cash to their accounts amid heightened concerns around the Omicron variant and a more hawkish Federal Reserve. Bank of America's monthly fund manager survey out Tuesday found cash allocation among investors surged 14 percentage points in December from November. Continue reading