BofA: downside immunity for equities has a few days

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Global stock markets have resisted expectations of a gradual withdrawal of monetary stimulus and inflationary pressures, with major stock indexes offering investors new highs. But the stock’s immunity to fears of rising interest rates may not last long, Bank of America analysts Merrill Lynch have warned.

Although investors expect the US Federal Reserve, which meets until tomorrow, to announce at the end of the meeting the start of the phase-out of monetary stimulus, the stock markets continue to rise, indifferent to the change in strategy. state monetary policy. The global power plants of the big banks.

As Wall Street hit new records at the start of the week, France’s CAC-40 index in Europe is set to end the session at record levels.

Stock market optimism has been underpinned by the third quarter earnings season, but Bank of America analysts warn it’s only a matter of time before stocks need to account for a more unfavorable environment in terms of monetary stimuli in a central bank addicted to liquidity. Marlet.

On the other hand, Goldman Sachs disagrees with Bank of America and maintains that stocks will continue to be supported in the absence of alternatives, given the low interest rates on bonds. The Wall Street giant’s strategic analysts expect “healthy” levels of growth over the coming year, fostering a favorable environment for equities.


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