The Bulls Are Back: BofA Survey

At the same time, panelists' inflation expectations jumped 12 points to net 43% expecting a higher global consumer price index in the next 12 months.

Twenty percent of fund managers said they now think the global economy will experience above-trend growth and below-trend inflation, a seven-month high, while 65% continued to expect below-trend growth and inflation.

Investor concerns about the credit cycle held steady in December, with net 39% of those surveyed maintaining that corporate balance sheets were overleveraged.

Global corporate profit expectations surged 23 points from the November survey to a 20-month higher of net 14% of investors expecting profits to improve over the next 12 months.

Asked what they would most like to see companies do with cash flow, 46% of respondents said increase capital spending, 36% wanted them to improve their balance sheets and just 15% said they should return cash to shareholders.

Concerns about a trade war are still considered the biggest tail risk, cited by 33% of fund managers, down six points from November. Twenty-two percent said they were worried about the outcome of the 2020 presidential election, 19% about a bond bubble and 12% about monetary policy impotence.

Long U.S. tech and growth stocks headed the list of most-crowded trades, identified by 34% of investors. Twenty percent cited long U.S. Treasuries, 20% long investment-grade corporate bonds and 19% short volatility.

— Check out Why Impeachment 'Means Nothing' to the Markets: Commonwealth's McMillan on ThinkAdvisor.