Bank of America strategist: The market is ignoring risks—watch out for AI investments turning against investors

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ME News, July 24 (UTC+8): Sebastian Raedler, Head of European Equity Strategy at Bank of America (BofA), recently issued a stern warning: the current stock market pricing logic is entirely based on the assumption that “everything is perfect.” This extreme optimism has not only pushed market valuations to elevated levels, but also left investors’ risk exposure completely unprotected. Raedler noted that current market expectations for key metrics such as profit margins and five-year forward earnings growth have already surged to historical highs. In stark contrast, the “risk premium” used to gauge market risk-aversion sentiment has fallen to its lowest level in 20 years. Raedler advised that investors should decisively pull back from cyclical sectors with stretched valuations and fragile underlying logic, and instead look for “high-quality defensive stocks” that the market has long overlooked. He specifically highlighted the healthcare and consumer staples sectors. (Source: BlockBeats)
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