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Wall Street bankers warned of toppy stock markets and a looming near-term retreat after exuberance from unprecedented economic stimulus has led to “frothy” asset prices.

BofA’s latest weekly fund flow data on Friday reflected some of that sentiment, with investors storming into money markets and gold funds while pulling some money out of emerging markets that had attracted billions of dollars over the past 16 weeks.

U.S. stocks, however, were the standout performer with inflows of $10 billion.

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In the week to Wednesday, cash funds attracted $29.1 billion and gold $1.5 billion, marking the largest inflow since August, the U.S. investment bank said.

“Sell the vaccine: frothy prices, greedy positioning, inflationary and desperate policymakers, peaky China and consumer all ultimately (a) toxic brew in 2021,” said BofA’s chief investment strategist Michael Hartnett.

The recent buying spree has sent U.S. stock valuations soaring to 23 times 12-month forward earnings - levels hit during the peak of the dotcom bubble in the late 1990s. The numbers prompted Citi to downgrade the region to “neutral” from “overweight” on Thursday.

Citi, however, was bullish on British and emerging market stocks, citing “reasonable” valuations.

BofA said the 2020 trend to “buy everything” had trickled into 2021, but it expects a slowdown in risk assets as “policy, positioning and profits” peak around the end of the first quarter.

Goldman Sachs’ Chief Executive David Solomon said he was preparing for more stock market volatility, particularly in the near term, and sees some “excess in markets”, Axios reported on Thursday.

‘SPECULATIVE FEVER’

Analysts at investment bank Saxo also warned investors on Friday about “aggressive speculative fever” in some technology and green stocks, recommending they start reducing exposure to so-called bubble stocks.

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At 206 times 12-month forward earnings, Tesla is among the list of bubble stocks Saxo highlighted in its note to clients. That’s a far cry from Daimler’s 10 times forward earnings and Toyota’s 16 times.

The recent jump in cryptocurrencies also sparked debate among bankers.

Noting the violent inflationary price action boosting bitcoin in the past two months, BofA said the world’s popular cryptocurrency “blows the doors off prior bubbles”, such as the dotcom boom, China in the 2000s and gold in the 1970s.

Bitcoin hit $40,000 on Thursday, having doubled in price within a month, and has rallied more than 900% since a low in March. It topped $30,000 for the first time on Jan. 2, having breached $20,000 on Dec. 16.

JPMorgan has said bitcoin’s current highs are unsustainable, but it added that the digital currency could climb much higher in the long term.

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