Michael Hartnett, from Bank of America, is one of Wall Street’s most listened voices, and now talked about the future of actions.
Michael HartnettBank of America’s main strategist warned The risk of a bubble in the actions is growing Because monetary policy and regulatory norms are becoming more and more flexible, which makes Wall Street raise prices to dangerous levels.
The specialist said The global monetary policy rate decreased from 4.8% to 4.4% in the last yeardriven by significant reductions in indebtedness costs by the United States Central Banks, United Kingdom, Europe and China. And according to its projections, the rate could continue to fall to reach 3.9% in the next 12 months.
At the same time, those responsible for economic policy in the US evaluate regulatory reforms aimed at promoting greater participation of retail investors. “More retail operators involve more liquidity, more volatility and a greater bubble,” Hartnett warned in a note.
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It should be noted that US actions reached new historical maximums in the last weekled by optimism around the solidity of economic growth and the good performance of corporate profits, even in a context of increased tariffs.
The market partially trusts the actions
In this framework, Wall Street analysts like Michael Wilson, from Morgan StanleyThey argue that there are reasons to remain optimistic, citing the positive support of the benefits, a robust operational leverage and tax advantages.
However, strategists JP Morgan and UBS believe that the market could be underestimating the still latent commercial risks.
Beyond the rise of this Friday at the S&P 500, investors seem to adopt a cautious position on the eve of the monetary policy meeting of the Federal Reserve scheduled for next week.
Even so, capital tickets in global shares funds recovered during the week that ended on July 23. According to LSEG Lipper data, global investors allocated a net total of U $ 8,710 million to these fundsthus reversing the net withdrawals of US $ 4,400 million registered the previous week.
Source: Ambito
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