Everyone Says Equities Are Overvalued, So They’re Piling In
The New York Stock Exchange (NYSE).The recent earnings season has seen stocks climb to all-time highs, with traders expecting rate cuts and fearing inflation from tariffs significantly less.
Photographer: Michael Nagle/BloombergWe’re in the unusual situation where fund managers almost uniformly say US stocks are overvalued, yet everyone is piling in. This disconnect, as the S&P 500 Index sets repeated all-time highs, is the market’s biggest vulnerability going forward.
At the first sign of trouble — for example if tariffs do ultimately lift consumer prices and derail expectations for Federal Reserve interest-rate cuts -- they’re liable to sell. And it’s a risk the market may have to contend with in the next few months.
To get a sense of the latest positioning, look at the most recent Bank of America Global Fund Survey results.