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Bank of America warns of credit stress risks

Bank of America analysts flagged that tightening credit conditions could spark “passive selling” across equities — when funds have to offload positions because liquidity dries up, not because fundamentals change. They view this as an early bear-market signal if lending stays weak. It’s not a panic call, but a heads-up that systemic risk builds quietly when credit markets strain and passive flows amplify every downturn.

#StockMarket #CreditTightening #BofAInsights

🛑 Investor Paradox: 53% consider AI a bubble, but continue to buy

A November survey by Bank of America among asset managers with over $475 billion revealed a key contradiction: while most consider the AI sector overheated, they continue to increase risk positions.

Key dilemmas:

· 53% of investors call AI a bubble but maintain investments
· 63% believe the market is overvalued, but the share of stocks in portfolios is growing
· The cash share has fallen to 3.7% - the lowest in a year
· The main "overloaded trade" is long on the "Magnificent Seven"

This is classic behavior in the later stages of a bull market - investors recognize the risks but fear missing out on potential returns. The composite sentiment indicator, in particular, has reached its most bullish level since February.

When professional managers act against their own concerns - it is a strong signal of market irrationality. Subscribe to keep track of key sentiment indicators.

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