BofA Flags Sell Signal as Fund Manager Cash Falls to 3.9%

3 articles · Updated · CNBC · May 19

Fund managers' cash holdings fell to 3.9% from 4.3%, pushing Bank of America Securities' closely watched gauge below its 4.0% sell-signal threshold.
Across 24 such signals since 2011, the median four-week loss was 1%; outcomes ranged from a 29% drop to a 4% gain, underscoring the indicator's warning of limited upside.
Michael Hartnett said "bull capitulation" is nearly complete after stocks rallied about 19% from March lows and the S&P 500 topped 7,500 last week on AI-driven optimism led by chipmakers and the Magnificent Seven.
That optimism is colliding with persistent risks: oil stayed above $110 a barrel, the 30-year Treasury yield rose past 5.18% to its highest since 2017, and semiconductor shares including Micron helped lead Tuesday's selloff.
BofA also found near-universal optimism on global growth, with only 4% of managers expecting a hard landing—a backdrop that can leave markets vulnerable when cash buffers are thin.

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