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Bloomberg
3 days ago
- Business
- Bloomberg
BofA: Record Number of Investors Find Stocks Overvalued
00:00 Bank of America with its August Global Fund manager survey showing investors are the most bullish since February, with a record 91% calling U.S. stocks overvalued. Joining us now to discuss this and a scholar of Bank of America analysts. Welcome to the program. Let's just talk about that 91%. So a lot of people seem to think many. In fact, the overwhelming majority believe the US stocks are overvalued. How many are. Sure. How many are underway at the moment? Hey, John, look, I mean, clearly, that's that's a very important question to to to our investors and clients, because the valuation and the perception of the global stock market valuation was really a highlight in this month's Global Fund Manager survey, which was not really a decisive survey, not like the survey that came out in April, which was a clear moment to buy of the survey from about December 2024, which was a great moment to to to sell the market. But this month, the highlight was really the perception that global equity markets are overvalued. The highest share of investors saying they think the global equity market is overvalued. Since 1998, when we first starting started asking this this question. The share popped. Even the highs observed during the Internet bubble in 1999 2000, or the everything bubble in 2021. And of course, the perception that global equity markets are very rich, overvalued is driven by the US equity market with here as well. 91% of famous participant saying that they think the US equity market is is overvalued. Definitely valuations are very important for long term equity investors. In fact, that is the one factor that matters when you invest in terms of on on on stocks over the course of a of a ten year period. However, this has not been an element that that caused major concerns because investors continue to rotate towards the US equity market that were very underweight in April. This underweight is being cut progressively and despite the very high perception of of overvaluation, other firms positioning in terms of US equities remain net underweight, which is really a silver lining for US stocks. And so any is the way you see things is that this negative reservoir of pessimism that we can keep feeding on in the months to come, can we continue to see that grind higher? I think, you know, this negative reservoir of pessimism is really what emboldens the bulls right now, because when you look at the results from the infamous survey this month is that the bulls will really focus on the macro pessimism that in fact, in Greece versus where it was in in July, macro sentiment worsened a little bit. But also the bulls refocus focus on the fact that global equity exposure stands below the historical average net. 14% of our famous investors said they were overweight. The global equity market, the historical historical average since 2000 is roughly 25%. So is this based on these two metrics, the bulls will say there is further room to go in terms of positioning. However, there is also some substance to embolden the bear narrative and in particular, the fact that the average farmer's cash level remains at a low 3.9%, which historically has been a strong signal to say that global risk assets are toppy as now is a good time to retreat or hedge your your position.
Yahoo
16-04-2025
- Business
- Yahoo
Investors haven't been this bearish on the economy for 30 years
Investors are the most pessimistic they've been on the economy in 30 years, per Bank of America. They're also gloomy on the market, with a record share of investors planning to pare stock holdings. Bank of America surveyed 164 fund managers with $386 billion of assets under management. A new survey found investors haven't felt this dour on the economy in decades, another sign of how heavily Donald Trump's trade war is weighing on sentiment. As part of its weekly Global Fund Manager survey, Bank of America took the pulse of 164 fund managers with $386 billion of assets under management. As shown by the dark blue in the chart below, global growth expectations have fallen to a 30-year low. The light blue line shows a similar — though not quite as extreme — decline in S&P 500 expectations. Another chart from the survey illustrated the pessimism around equities, based on the number of participants planning to trim exposure to US stocks, which hit a record low. The sharp decline in expectations reflects how hard investors have been hit by Trump's April 2 "Liberation Day" tariffs, which helped spark the biggest stock sell-off since the pandemic. The major indexes have clawed back some of the losses after Trump backtracked and issued a 90-day pause on most of his tariffs. Still, the S&P 500 is down 12% from its peak in mid-February. This embedded content is not available in your region. Tariffs have worried investors on two fronts. First, markets are antsy about the impact import duties could have on US growth, with chatter about a potential recession making the rounds on Wall Street in recent weeks. Second, traders are worried about the inflationary impact of tariffs, as companies could pass tariff-related price increases on to consumers. Fears of higher inflation are also raising concerns about stagflation, a nightmare scenario for the economy that involves sluggish growth and stubbornly high prices. About 80% of fund managers said they believed the biggest tail risk to markets was the trade war triggering a global recession, according to the BofA survey. The share of investors predicting a tail risk hasn't been that large in 15 years, the bank added. Meanwhile, 90% of fund managers said they expected to see stagflation in the global economy over the next 12 months — the highest stagflation fears have been since 2022. Trade war pressures don't look like they'll lighten up anytime soon, either. During the 90-day reprieve, the US is negotiating with dozens of countries on trade. Meanwhile, the White House has threatened to impose a 245% tariff on imports from China as tensions escalate between the two nations. Read the original article on Business Insider Sign in to access your portfolio
Bloomberg
18-03-2025
- Business
- Bloomberg
When Does A Correction Become A Bear Market?
Welcome to the award-winning Money Distilled newsletter. I'm John Stepek. Every week day I look at the biggest stories in markets and economics, and explain what it all means for your money. It's the middle of the month. That means my favourite investor sentiment indicator is out. It's the Bank of America Global Fund Manager survey, which tells us each month where the world's money managers are directing their capital flows (or at least, where they wish they were directing them).
