Wall Street Warns Bond Market Rout Will Catch Up With Stocks
- BofA analysts say divergence between stocks, bonds won’t last
- U.S., European stocks trade near records despite tapering woes
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The era of abundant liquidity is coming to an end and stock markets trading at record highs won’t be able to stay immune for much longer, according to Bank of America Corp. strategists.
This is the latest in a series of warnings by top Wall Street brokers that the exuberance, which has fueled the rally in European and U.S. equities, may not last. Stocks have so far largely ignored a worsening rout in bond markets, where investors are pricing in a swift tightening of monetary policy, as robust earnings and lack of investment alternatives drive risk appetite.