The Tell: Investors fear ‘bond shock’ as overvaluation jumps to all-time high

Investors continued to hoard cash and shun bond and equities in September due to concerns over an overheated debt market and too high stock prices, according to Bank of America Merrill Lynch’s survey of fund managers published Tuesday.

An all-time high of investors now say equities and bonds combined are overvalued, with a net 54% of the respondents saying those securities have become too pricey. For stocks exclusively, the overvaluation was seen as the highest since May 2000.

Meanwhile, about a third of the fund managers see Treasurys as the biggest driver of stock prices over the next six months, up from around 25% just a month ago.

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