BofA Warns Stock Market Bulls Should Consider Moderating Aggressive Buying Behavior

Odaily Odaily reports that the latest Fund Manager Survey from Bank of America shows that global investors who have been aggressively buying stocks should consider reducing their portfolio exposure. The bank's strategists pointed out that asset allocators have turned extremely bullish—which is usually a warning signal for the market. The proportion of cash held by investors has fallen to a "very low" level of 3.6% of assets, down from 4.1% last month. 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), placing it in the extremely bullish range, suggesting that exposure to stocks and high-beta assets should be reduced. With market positioning being overly optimistic, further upside for risky assets during the summer will be capped." (Jin Shi)