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Bank of America analysts recommend investors begin to reverse the strategy of buying AI capital expenditure beneficiaries while selling white-collar threatened industries and consumption stocks.
The bank's note argues that this relative trade is facing pressure as AI capex strength may be more priced in than not.
The note states that underestimating US consumer appetite is dangerous and that the market may have already priced in the strength of capital expenditures.
The recommendation comes as the Nasdaq hit a fresh record high and the 10-year and 30-year Treasury yields reached 2002 highs.
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