A recent report suggests that the U.S. may be in the midst of a nascent bubble as people adopt generative artificial intelligence (genAI) technology faster than expected. The warning, pointed out by Bank of America analysts in an EPFR Global report, has caused people to think deeply about the direction of the market. The report points out that although the development of AI technology has brought optimism to the market, investors should not blindly chase the rally.
The report also mentions a number of factors that could limit or reverse the rally**, including rising inflation, changes in nominal yields and real interest rates. As inflation rises, more and more businesses are likely to raise their products and services in the coming months, which could push prices even higher.
On the other hand, the report also noted that in the latest week, inflows into US penny stocks reached their highest level since June 2022, totaling $5.1 billion. The bond market and ** markets also attracted $15.2 billion and $15 billion in inflows, respectively, while the cash market saw inflows of $2.1 billion. In contrast, $900 million was outflowed from the market.
Breaking down the flow of money specifically, $12.2 billion flowed into the U.S.**, the largest inflow in eight weeks. At the same time, the bond market attracted inflows for the ninth consecutive week, while the *** market saw outflows for the fourth consecutive week.
Regionally, emerging markets attracted inflows totaling $2.3 billion for the 12th consecutive week; Japan attracted inflows for the sixth consecutive week, with inflows of $800 million; Europe, on the other hand, saw its eighth consecutive week of outflows, with outflows of $800 million.
The release of this report has aroused the attention and reflection of the market. While the development of AI technology has brought optimism to the market, there are also analysts who warn investors to be cautious. In such cases, investors may need to carefully assess market risks and consider diversifying their portfolios to reduce risk.
This report reminds us that while market optimism can drive ***, it can also pose risks. Investors should remain vigilant and not be fooled by short-term tailwinds, but develop a reasonable investment strategy based on their risk appetite and investment goals.