(MT Newswires) -- Michael Hartnett, chief investment strategist at Bank of America Corp sees a bubble in the markets around artificial intelligence and cryptocurrency stocks. He suggests using the Barbell strategy, i.e. investing both in the bubble and in distressed assets. He cites the example of Russia in 1999, which outperformed despite the NASDAQ bubble, starting at three times earnings and ending at six or seven.

Hartnett mentions that the bubble has classic characteristics, such as rapid price movements and a certain narrowness of the market, indicating that it is not a bull market. He points out that bubbles can take a long time to burst, sometimes several years.

He points to the US macroeconomic data, which seems to be becoming more worrying. Hartnett says that the labour market is cracking and that nobody in the US expects inflation to fall back to 2%. He puts it at between 3 and 4%, which is worrying for risk assets.

He also mentions the US debt, which is increasing by a trillion dollars every 100 days, and considers that this poses a risk.

Finally, Hartnett believes that the Chinese market looks attractive and that the bad news is already built into current prices. He recommends investing in the best Chinese companies.

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