Record Number of Fund Managers Say U.S. Equities Are Overvalued

(Bloomberg) -- Measures of stock valuation have been flashing caution for months. Humans are finally starting to take notice.

Fund managers now say stocks are the most overd they have been in nearly 20 years, according to a survey done last week by Bank of America Merrill Lynch.

Survey positioning data argues for a “March [or] April risk rally ‘pause,”’ with stocks deemed the most “overd” since 2000, the team, led by Chief Investment Strategist Michael Hartnett wrote in a note to clients. “The U.S. is identified as the most overd region,” they added, noting that net 81 percent of respondents said U.S. stocks are overd.

In contrast, emerging-market equities had a net 44 percent saying they’re underd and eurozone equities sat at a net 23 percent calling the region underd.

Investors appear to be putting their money where their mouths are. The survey also tracks changes to asset-class positioning each month, and emerging markets saw the biggest inflows, with the U.S. seeing the biggest outflows.

In terms of what respondents said will finally cause an end to the bull market that now spans eight years -- higher interest rates, weaker earnings and protectionist policies were the top three choices.