BofA’s Hartnett Warns Froth Is Building in US Stocks, Crypto
12/06/2024 16:24
(Bloomberg) -- A powerful rally in US stocks as well as cryptocurrencies has left the asset classes looking frothy, according to Bank of America Corp.’s Michael Hartnett.Most Read from BloombergKansas City Looks Back on its Long, Costly Ride With MicrotransitNYC’s Run-Down Bus Terminal Gets Approval for $10 Billion RevampAs Wars Rage, Cities Face a Dark New Era of Urban DestructionThe S&P 500’s price-to-book ratio has surged to 5.3 times in 2024, approaching a peak of 5.5 hit in March 2000 durin
(Bloomberg) -- A powerful rally in US stocks as well as cryptocurrencies has left the asset classes looking frothy, according to Bank of America Corp.’s Michael Hartnett.
Most Read from Bloomberg
-
Kansas City Looks Back on its Long, Costly Ride With Microtransit
-
NYC’s Run-Down Bus Terminal Gets Approval for $10 Billion Revamp
-
As Wars Rage, Cities Face a Dark New Era of Urban Destruction
The S&P 500’s price-to-book ratio has surged to 5.3 times in 2024, approaching a peak of 5.5 hit in March 2000 during the height of the technology bubble, according to data compiled by Bloomberg.
BofA’s Hartnett said there’s a high risk of “overshoot” in early 2025 if the S&P 500 nears 6,666 points — about 10% above current levels. The bank’s bull-and-bear indicator shows no sign yet of exuberance among global investors.
The strategist took a more neutral tone on equities this year after remaining bearish in 2023.
The S&P 500 has surged about 27% in 2024 and is tracking its best year since 2019 on optimism around artificial intelligence and wagers that President-elect Donald Trump’s “America First” policies would boost domestic markets. His support for crypto also helped bitcoin briefly rally past $100,000 this week.
Hartnett said that with a market capitalization of over $2 trillion, bitcoin was comparable to the 11th largest economy in the world.
--With assistance from Michael Msika.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.