A “baby bubble” is forming within the U.S. inventory market, fueled by “monopolistic tech” and investor enthusiasm round synthetic intelligence, based on BofA Global Research.
The AI bubble is “front running” interest-rate cuts by the Federal Reserve, funding strategists at BofA warned in a analysis word dated Jan. 25. Many traders anticipate that the Fed might begin to decrease its benchmark charge this yr, as inflation has eased considerably from its 2022 peak.
But the actual charge for the 10-year Treasury word would wish to rise again to 2.5%, from a present 1.75%, to pop the bubble, the strategists stated.
BOFA GLOBAL RESEARCH NOTE DATED JAN. 25, 2024
The U.S. inventory market is up this yr, with shares of know-how corporations fueling the S&P 500’s rise to a sequence of report highs in January. Chip maker Nvidia Corp.’s inventory
NVDA,
has skyrocketed round 23% to this point in 2024, FactSet knowledge present, eventually test.
Meanwhile, the S&P 500 completed Thursday at a recent report excessive of 4,894.16, advancing for a sixth straight day to mark its longest profitable streak since Dec. 14, based on Dow Jones Market Data.
U.S. shares completed largely decrease on Friday, with the S&P 500
SPX
slipping 0.1%, the Nasdaq Composite
COMP
falling 0.4% and the Dow Jones Industrial Average
DJIA
gaining 0.2%, preliminary knowledge from FactSet present.
Still, the S&P 500 has climbed 2.5% to this point this yr, after surging 24.2% in 2023 on the again of huge positive aspects by huge tech corporations.
Source web site: www.marketwatch.com
