Over 90% of fund share managers, a new record, reportedly think that the US stock market is overvalued, according to a Bank of America (BofA) survey.
Per a new Bloomberg report, 91% of polled fund managers think US stocks are overvalued, the highest rate since 2001.
[adinserter block="1"]BofA’s poll also found that investor allocation in foreign markets has climbed to its highest weight since February, signalling a potential sentiment shift on US markets.
BofA strategist Michael Hartnett warns that the recent stock market rally may be at risk of turning into a bubble, especially given that the bank’s survey showed that cash levels as a percentage of total assets were at 3.9% – a level that has historically signalled an incoming sell-off.
On the contrary, a net 49% of respondents believe that emerging market (EM) stocks are undervalued, the most since February of 2024. Among the most “crowded trades,” the most popular answers were long the Magnificent 7 stocks, short the dollar, and long gold.
Respondents said that the biggest tail risks for markets include a trade war-induced recession, runaway inflation preventing Fed rate cuts, “disorderly rise” in bond yields, an artificial intelligence (AI) equity bubble and dollar debasement.
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