[Bank of America Research Highlights Risks from U.S. Treasury Yields and AI Capital Expenditures, Recommends Contrarian Asset Allocation]
Bank of America’s October 13, 2026 research report highlights that the October global fund manager survey shows cash levels at 3.9%, with 37% of investors believing that the 10-year U.S. Treasury yield would need to reach 6.0% before shifting from stocks to bonds. The most crowded trades are long global semiconductors (45%) and short U.S. Treasuries (27%). Additionally, 39% of investors believe that capital expenditures by AI mega-cap companies are a source of credit events. Furthermore, 76% of investors expect the Federal Reserve not to raise interest rates on October 28. Bank of America recommends contrarian trades: going long on bonds, REITs, and consumer sectors, while shorting stocks, technology, banks, and emerging markets. (Source: Tide Research)
