Bank of America warns stock market bulls should consider moderating aggressive buying behavior

Odaily Odaily reports that the latest Bank of America fund manager survey shows global investors who have been aggressively buying stocks should consider reducing their exposure. The bank's strategists pointed out that asset allocators have become extremely bullish—which is often a warning signal for the market. The proportion of cash held by investors has dropped from 4.1% of assets last month to a "very low" level of 3.6%. Meanwhile, U.S. stock holdings are at their highest level since December 2024, with a net overweight of 24%.

A team led by Michael Hartnett wrote in the report: "Bank of America's 'Bull & Bear Indicator' reading is as high as 9.4 (the indicator ranges from 1 to 10), falling into the extremely bullish range, suggesting that exposure to stocks and high-beta assets should be reduced. With market positioning overly optimistic, further upside for risk assets during the summer will be limited." (Jinshi)