According to Bank of America, investors have been piling a lot of money in stocks recently.
The fact points to investors’ readiness to open short-term sell positions amid a lower risk of high inflation and moderate monetary policy. Such an assumption was expressed by Bloomberg analysts.
Meanwhile, EPFR Global has unveiled its own estimates. Thus, in the last month and a half, global equity funds have seen inflows of nearly $70 billion. Analysts suppose that in the next six months, consumer prices will surge, thus forcing the Federal Reserve to switch to a tighter policy.
Notably, short-term sell orders on risk assets are likely to be profitable during the period from late August to early September. However, the main scenario suggests a prolonged long-term trading period.
Not so long ago, the main stock indices increased amid hopes that the Federal Reserve would stop the cycle of monetary policy tightening. News about a decline in the US inflation has also encouraged investors.
Tech shares manifested the best performance. As a rule, higher interest rates hurt tech companies since they have high borrowing needs.
Regardless of this fact, most economists at Wall Street, including analysts at Hartnett and Morgan Stanley, have not seen yet bearish signs for the US stock market. They believe that the situation will hardly change until the end of the year. By the way, “investors have mostly shrugged off risks so far”.
