Bank of America Explains How a Market Bubble Could Soon Form — and Lays Out the Perfect Trade to Combat It

Bank of America explains how a market bubble could soon form — and lays out the perfect trade to combat it

Spencer Platt/Getty ImagesBofA analysts say risks of a stock market bubble in the second half are building.The bank's Michael Hartnett said expectations for rate cuts and lower taxes are fueling inflows to stocks. His team says a top trade is owning US growth stocks and international value stocks.A Bank of America analyst sees the risk of a speculative stock market bubble increasing as expectations that the Federal Reserve will cut interest rate…

Market Bubble Fears Heightened by Fed's Interest Rate Outlook and Tax Cut Speculation

A recent report by Michael Hartnett, Bank of America analyst, has put a warning on the looming threat of a speculative stock market bubble. Hartnett argues that the leading factor that can cause such a bubble is the general hope among investors that the U.S. Federal Reserve is about to flip on its interest rate policy. This transition, together with the anticipation of tax reductions, is attracting a flood of investments in the securities market…