Wall Street bankers warned of toppy stock markets, foreseeing a pullback in the near-term as exuberance from unprecedented central bank and fiscal stimulus 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, a recent winner which had attracted billions of dollars in the last 16 weeks. Still, U.S. stocks stood out with $10 billion inflows. “Sell the Vaccine: frothy prices, greedy positioning, inflationary and desperate policy makers, peaky China and consumer all ultimately toxic brew in 2021,” Michael Hartnett, BofA’s chief investment strategist, said. The recent buying spree has sent U.S. stock valuations soaring to 23 times 12-month forward earnings – levels it hit during the peak of the dotcom bubble in late 1990s – prompting 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 first quarter. Goldman Sachs’ Chief Executive David Solomon said he was preparing for more stock market volatility, particularly in the near term, and currently sees some “excess in markets”, Axios reported on Thursday. In the week to Wednesday, cash funds saw $29.1 billion inflows and gold attracted $1.5 billion, marking the largest inflow since August, the U.S. investment bank said. Stock valuations approach late 90s levels Noting the violent inflationary price action boosting bitcoin in the last 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, doubling in value in less than a month, and it has rallied more than 900% since a low in March. It topped $30,000 for the first time on Jan. 2, after surpassing $20,000 on Dec. 16.