The U.S. stock market continues to set new meteoric highs despite an ongoing global pandemic and staggering unemployment rate. Analysts are watching out for signs of an upcoming market correction, especially with much of the stock market seemingly tied to how quickly the vaccine is distributed and the size of an imminent COVID-19 relief package from Congress. Still, survey data shows how traditional warning signs of an end to the current bull market aren’t scaring off investors, as many anticipate a continuation of the bull run through 2021.
In a new survey from Bank of America of investors and asset managers, 53 percent say the market is currently in a late-stage bull run compared to just 13 percent who say the market is currently in a bubble ready to burst. A surprising 27 percent say the current market is actually in an early bull run.
The survey went on to show how most investors are still optimistic about future earnings across the year, with 61 percent of investors reporting that they’re currently overweight on global equities. The top risks being evaluated are how the vaccine rolls out, how strong the bond market is and whether inflation will rise throughout the year. In terms of the most popular stocks, 35 percent and 25 percent of investors say long positions of tech and Bitcoin, respectively, are the most crowded trades.
Ultimately, 34 percent of investors are expecting a V-shaped economic recovery in 2021; a marked improvement from just 10 percent who said the same nine months ago. A significant 91 percent of investors expect a stronger economy in 2021 than 2020.