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- A record net 78% of investors said that the stock market is overvalued, according to Bank of America’s June Fund Manager Survey, released Tuesday.
- It’s the highest number of investors to say stocks are too expensive in the survey’s history, from 1998.
- While Wall Street might be past “peak pessimism,” June optimism remains “fragile, neurotic, nowhere near dangerously bullish,” wrote BofA’s Chief Investment Strategist Michael Hartnett and investment strategist Shirley Wu in the survey.
- Read more on Business Insider.
A record number of investors think that the stock market is “overvalued,” according to Bank of America’s June Fund Manager survey.
Net 78% of investors said that the stock market is too expensive, the most since the fund manager survey began in 1998, Bank of America said Tuesday. The firm surveyed 212 fund managers with $598 billion under management during the week ending June 11.
While Wall Street might be past “peak pessimism,” June optimism remains “fragile, neurotic, nowhere near dangerously bullish,” wrote BofA’s Chief Investment Strategist Michael Hartnett and investment strategist Shirley Wu in the survey.
Bank of America Fund Manager Survey
The June Fund Manager Survey comes just after US stocks whipsawed following a more than 40% rally from March lows. The last time that fund managers thought the market was overvalued was in 2018, just before the year-end pullback. Stocks did eventually recover from those losses and rallied to new highs before the coronavirus pandemic hit this year.
The nature of stocks’ surge from the coronavirus rout is in question — a majority 53% of fund managers surveyed say that the market rebound from March lows is a “bear market rally,” while 37% believe it is a new bull market.
And going forward, a majority of investors are betting on a bumpy recovery. Only 18% of investors said that they expect the recovery from the shock of the coronavirus pandemic to be V-shaped, while 64% said that it will be U-shaped or W-shaped, down from 75% in the May survey.
Still, investors are becoming less worried about a global recession over the next year — those expecting a recession slid to 46% in June from 77% in May and 93% in April.
The biggest tail risk that investors see in markets is still a second wave of coronavirus cases —49% said that was their top concern, followed by permanently high unemployment and a Democratic sweep in the 2020 election. Investor cash levels dropped to 4.7% from 5.7% in May, the biggest slump since 2009.
More than 70% identified US tech and growth stocks as the most crowded trade.
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