For its part, a monthly survey by Deutsche Bank showed that an overwhelming majority of respondents believe that US tech stocks are in bubble territory as investors remain bearish on more aggressive policy moves and higher yields.
“Higher-than-expected inflation remained the predominant driver of these bearish fears, but its counterpart, a more aggressive Fed, drew far more concern from respondents this month,” Deutsche Bank strategists said in a monthly note.
In response to likely central bank rate hikes this year, investors have increased their positions in equities, notably in Europe, cyclical banks, commodities and industrials, sectors expected to benefit from the hikes. of types. The change in position has been extreme compared to historical averages. Investors have increased bullish bets on banks, commodities and materials, and cut positions on technology, emerging markets and bonds. The rise in rates harms technology companies for a not minor issue: to innovate, they need access to cheap financing. Something that will not happen if the Fed decides at least four hikes during the year.
Investors have become more bullish on European stocks from a global reopening trading perspective and want to increase their exposure in the next 12 months as well, according to the BoFA survey. The three most popular trades were long tech stocks, short US Treasuries and short Chinese stocks, according to the US investment bank.
Source From: Ambito
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