How frenzied is global stock speculation this year? The following chart from Bank of America is perhaps the best illustration. Because it showsSince November last year, inflows into global equity funds totaled nearly $570 billion, exceeding the cumulative inflow of $452 billion in the previous 12 years.

In other words, the inflows in the past five months are nearly 26% higher than the total in the previous 12 years.

Judging from the above data, the stock market investment is indeed crazy. However, Art Hogan, chief market strategist at, National Securities, believes that the current market has a certain logic. On the whole, it is not irrational exuberance, and it has not reached the level of the Internet bubble from 1999 to 2000. Moreover, the stock market has its own reasonable driving force, which is obviously the profit growth that may be brought about by the surge in economic activity in the future.

Earnings for public companies are expected to grow by 23.8% in the first quarter of this year, according to CNBC, which is the fastest pace since the third quarter of 2018, according to FactSet.

It is worth noting that Bank of America data also show that the investment absorbed by the stock market is still negligible compared to the bond market. As the bank's chart below shows, the global bond market has sucked in $2.4 trillion since the 2008 financial crisis, while the stock market has only $1,000bn, less than half.

Separately, Bank of America found that technology stocks had seen three consecutive weeks of net outflows as of last week. Michael Hartnett, chief investment strategist for global research at Bank of America, believes that the risk premium in global equities does not signal a sell-off or a call to buy compared to global bond yields.

Bank of America's global earnings per share (EPS) model peaked at 35 per cent year-on-year growth in April and has since turned downwards, suggesting that the second quarter of this year may be the peak of earnings. Coincidentally, Albert Edwards, global strategist at Societe Generale, and Michael Wilson, global equity strategist at Morgan Stanley, both recently warned of a decline in stock market and corporate earnings in the second half of the year.

Bank of America believes that the following chart of the Nasdaq 100 compared to the S & P 500 and Russell 2000 is important. If the ratio of the Nasdaq 100 to the S & P, which represents the broader market, does not hit a new high, then it will confirm the inflation rotation, and if it can hit a new high, the small-cap stock index Russell 2000 will be in trouble.

Goldman Sachs recently found that since the end of March, the shift in US stocks to value stocks shows signs of ending: the ratio of the growth index to the value index in the Russell 1000 index has broken through the upper edge of the recent range. However, the ratio of the Russell 2000 index to the Nasdaq 2000, which is also representative of growth stocks, hit a long-term decline range and began to turn downwards; technology stocks led the rise, but the market was also strengthening.