The vast majority of fund managers believe that bitcoin is a bubble, but have the opposite view of US stocks, according to a Bank of America survey.
In particular, only 7% of investors believe that there is a bubble on Wall Street, while 74% believe that this applies to the world’s largest cryptocurrency, whose price has risen yesterday, above $62.700, to a new record level.
64% estimate that US stocks are at an advanced stage of the uptrend, while 25% believe that it is still in its infancy and therefore has a large uptrend. Bank shares are the ones in which managers are most placed, for the first time since May 2018.
An important finding of the research is that the respondents no longer consider the coronavirus as the biggest risk for the markets. The risks are now mainly in the gradual reduction of the Fed’s bond portfolio, the so-called “taper tantrum” (32% of respondents), in inflation (27%) and in the tax increase announced by Biden.
Eighty-five percent of executives expect global corporate profits to rise in the next 12 months, down from 89 percent in the previous survey, but still close to historically high levels.
BofA itself warns analysts about the risk of inflation, due to the expected rapid recovery of the US economy.
“In our view, the risk is that investors will face such a sharp acceleration in growth and inflation that it will catch economists and the Fed completely unprepared,” said a BofA executive.
Inflation and retail sales data will be released this week, which will provide an overview of the consumer price index and investor behaviour last month that received additional support from the US government.
The US government has taken measures of about 5 trillion dollars to reduce the impact on the economy from the pandemic. The combination of these measures with the vaccination program has dramatically boosted the growth expectations of the US economy, which shrank by 3.5% last year.
The average estimate is now that US GDP will grow by 5.8% this year compared to 3.9% at the beginning of 2021, “but our economists now forecast 7% and feel that this percentage may be very low”, said the BofA executive.