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Must Read Research: Fund Manager Survey; Our New AI Tracker; Gold’s Rally and K-shape Convergence

Bank of AmericaCandace Browning
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Monthly Fund Manager Survey (August 2026)

  • Bullish Sentiment Metrics:
    • Overall sentiment ranks as the third most bullish period since 2022.
    • Cash levels have dropped to the sixth lowest reading in the dataset dating back to 1998.
    • Equity allocations have surged to their highest level since November 2021.
  • Macroeconomic Consensus:
    • A record 56% of managers foresee no economic landing, while only 4% anticipate a hard landing.
    • 37% of investors project double-digit earnings growth for the current period.
    • Consensus views include no Federal Reserve rate hike prior to the midterm election and no reduction in AI capital expenditures.
  • AI Trade Dynamics:
    • Semiconductors are identified as the most crowded trade, though specific mentions declined from 82% in July to 53% in August.
    • AI is cited as the largest tail risk, with hyperscaler capital expenditures viewed as the most probable trigger for a future credit event.
    • 71% of managers expect no reduction in AI spending in 2026, and 58% anticipate no employment impact from AI through 2028.
    • Strategist Michael Hartnett advises rotating within risk assets rather than abandoning them.

Frontier AI Tracker Analysis

  • Market Sentiment Indicators:
    • Competition is intensifying, driving down pricing and altering AI economics.
    • Token pricing represents a key metric for cloud profitability and recently fell 9% month-over-month to $2.21.
    • Despite the monthly decline, token prices remain 87% higher than their level from one year prior.
  • Competitive Landscape:
    • Anthropic leads intelligence rankings and captures 65% of spending, while DeepSeek leads usage share at 30%.
    • OpenAI cut pricing on GPT-5.6 Luna by 80% and GPT-5 Terra by 20%.
    • Google's Gemini 3.6 Flash delivered an estimated 17% improvement in cost efficiency.
  • Hardware Supply Chain:
    • GPU rental prices are higher year-over-year, indicating sustained demand.
    • Memory prices have risen by more than 400% compared to the prior year.
  • Forward-Looking Observations:
    • Analyst Justin Post identifies upcoming model launches from Meta and Alphabet as critical areas to monitor.
    • The ecosystem is characterized as healthy, with a divergence between falling model pricing and firm hardware demand.

Gold and Currency Strategy

  • Price Drivers and Models:
    • Recent gold rallies are primarily attributed to U.S. dollar weakness, specifically correlation with the Euro-Dollar exchange rate.
    • Strategic modeling suggests current buying volume is consistent with a $4,000 gold price target.
    • Accelerated purchasing would be required to support a move toward $5,000.
  • Structural Demand Factors:
    • Central bank demand in June remained well above the 12-month average.
    • China's gold imports continue to set new highs as part of efforts to internationalize the Renminbi.
    • Developments in digital gold trading that maintain a link to physical assets could create additional demand streams.
  • Policy Outlook:
    • A more accommodative tone from policymakers at the Jackson Hole symposium could provide further support.

Consumer Behavior and Economic Convergence

  • Spending Trends:
    • Aggregated credit and debit card spending rose 5% year-over-year in July, down from June's peak but still the strongest reading in three years.
    • Current spending volume is more than four times the 2025 average.
    • Moderation in July is attributed to fading World Cup-related spending, specific promotion timing, and gasoline price fluctuations.
  • K-Shaped Consumer Convergence:
    • Lower-income consumer spending grew 5.4% in July, effectively closing the gap with income growth (after-tax wages rose 5.2%).
    • Lower-income wage growth exceeded that of higher-income earners for the first time since December 2024.
    • The top 5% of consumers continue to lead overall growth, supported by an S&P 500 up nearly 20% year-over-year.
  • Household Financial Health:
    • The share of U.S. households paying credit card balances in full increased across all income groups.
    • Savings levels remain above inflation-adjusted 2019 levels with no signs of accelerated drawdowns.
    • Underlying spending trends remain stable when excluding gasoline and online retail sectors.