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April 13, 2021, 3:15 p.m. EDT

Here’s where investors see a market bubble — and it isn’t stocks, says Bank of America

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By Barbara Kollmeyer

A lull in the news lately has been broken early Tuesday by news that U.S. regulators want Johnson & Johnson’s COVID-19 vaccine suspended over blood-clot concerns (see below). That took the wind out of stock sails, in early action, apart from tech.

Stay tuned to that story. In the meantime, our call of the day comes from Bank of America’s monthly fund manager survey, which pinpoints where investors see a bubble right now. That is as stocks have been hovering at all-time highs.

“Only 7% of investors think the U.S. equity market is in a bubble, 25% think early-stage bull market, and 66% late-stage bull market,” said Bank of America chief investment strategist Michael Hartnett and his team in the April survey. Both macro and market optimism among global investors is running high, with prospects of a taper tantrum, inflation and higher taxes seen as more pressing risks, they found.

And investoprs have been pouring more money into equities, with the net overweight at 62% and near all-time highs.

So where’s the danger, then? According to 74% of those global fund managers, bitcoin /zigman2/quotes/31322028/realtime BTCUSD -4.21% may be bubbling over. The cryptocurrency /zigman2/quotes/31322028/realtime BTCUSD -4.21% just happened to hit a fresh high above $63,000 early Tuesday . Some are linking fresh gains to Wednesday’s equity-market debut for cryptocurrency exchange Coinbase.

Read: Should you buy Coinbase? The valuation is ridiculous, based on this math

This next chart shows how a long, or bullish, bitcoin position is the second-most crowded trade behind long tech.

The last word from Hartnett and the team? “April FMS [fund manager survey] uber-bullish, but no more bullish than Q1: we say positioning is peaking = cautious risk asset returns.”

Vaccine news rattles investors as CPI looms

The Dow /zigman2/quotes/210598065/realtime DJIA +0.66% and S&P 500 /zigman2/quotes/210599714/realtime SPX +0.74% are under pressure, though the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.88% is up. European markets /zigman2/quotes/210599654/delayed XX:SXXP +0.89% are flat and oil /zigman2/quotes/209723049/delayed CL00 -0.12% is perking up.

The Labor Department said its consumer-price index (CPI) for March rose 0.6% and 0.3% for core prices. That follows the biggest annual gain since 2011 for producer prices last week. 

The U.S. Food and Drug Administration and Centers for Disease Control and Prevention has recommended a pause in Johnson & Johnson’s /zigman2/quotes/201724570/composite JNJ +0.45% COVID-19 vaccine over rare blood clots that developed for six were women, between the ages of 18 and 48. Australia said

As India’s COVID-19 cases soar, the global vaccine supply could be strained . And a new study says the U.K. variant doesn’t make hospitalized patients more sick or cause more deaths.

Singapore-based Grab Holdings announced on Tuesday a deal to go public through a merger with special-purpose acquisition company Altimeter Growth worth nearly $40 billion.

Shares of OrganiGram /zigman2/quotes/209289540/lastsale OGI +12.70% are tumblin after the Canadian cannabis maker reported widening losses .

China reported slower-than-forecast exports on Tuesday, but imports went the other way. Treasury Secretary Janet Yellen will reportedly spare China the currency manipulator label in her first twice-yearly foreign exchange report.

The chart

Is this chart trying to tell us something right now? Spotgamma , which makes model-driven forecasts based on the open interest in S&P 500 options, has charted out the increasing popularity of short put bets — an options strategy that wagers an asset won’t fall, in this case the S&P 500.

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/zigman2/quotes/31322028/realtime
US : CoinDesk
56,530.48
-2,484 -4.21%
Volume: 0.00
May 9, 2021 9:00a
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/zigman2/quotes/31322028/realtime
US : CoinDesk
56,530.48
-2,484 -4.21%
Volume: 0.00
May 9, 2021 9:00a
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,777.76
+229.23 +0.66%
Volume: 311.63M
May 7, 2021 5:15p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,232.60
+30.98 +0.74%
Volume: 2.05B
May 7, 2021 5:15p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
13,752.24
+119.39 +0.88%
Volume: 3.97M
May 7, 2021 5:16p
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/zigman2/quotes/210599654/delayed
XX : STOXX
444.93
+3.91 +0.89%
Volume: 0.00
May 7, 2021 11:03p
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US : U.S.: Nymex
$ 64.82
-0.08 -0.12%
Volume: 393,845
May 7, 2021 4:59p
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/zigman2/quotes/201724570/composite
US : U.S.: NYSE
$ 168.50
+0.76 +0.45%
Volume: 5.32M
May 7, 2021 4:00p
P/E Ratio
29.76
Dividend Yield
2.52%
Market Cap
$443.73 billion
Rev. per Employee
$613,918
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/zigman2/quotes/209289540/lastsale
US : U.S.: Nasdaq
$ 2.75
+0.31 +12.70%
Volume: 12.10M
May 7, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$822.05 million
Rev. per Employee
$109,684
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