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

Odaily Planet Daily News: The latest fund manager survey from Bank of America shows that 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—often a warning signal for the market. The cash holdings ratio of 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 position of 24%.

The 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 zone, suggesting that exposure to stocks and high-beta assets should be reduced. Due to overly optimistic market positioning, the room for further upside in risk assets during the summer will be limited." (Jin Shi)