A Bank of America survey shows fund managers are more optimistic than they’ve been in years, with cash holdings at their lowest levels since 2010 and 82% believing a global recession is unlikely in the next year. Despite this confidence, 89% of respondents see U.S. stocks as overvalued, and Wall Street’s top concern for 2025 is a potential global trade war, with tariffs expected to be a key factor under Donald Trump’s proposed policies. Gold is seen as the best-performing asset in an all-out trade war, outperforming traditional safe havens like the dollar and bitcoin. The S&P 500 continues to trade near record highs, driven by strong U.S. market sentiment and AI-fueled growth, with Nvidia’s stock skyrocketing over 500% in two years. However, valuations remain historically high, with the index's forward P/E ratio at 22.3, significantly above the 16.4 average since 2000. Continue here.
