Bank of America Flags 7 Bear-Market Signs in U.S. Stocks, Sees 6% S&P 500 Downside
Updated
Updated · CNBC · Jun 8
Bank of America Flags 7 Bear-Market Signs in U.S. Stocks, Sees 6% S&P 500 Downside
2 articles · Updated · CNBC · Jun 8
Summary
Seven of Bank of America's 10 bear-market signposts flashed red in May, up from five in April and matching the average level seen before bear markets since 1990.
The bank said the warning is driven by worsening market concentration: the median gap between the best and worst S&P 500 tech quintiles hit 120 percentage points, the highest since February 2000.
Bank of America still sees selective opportunities in S&P 500 constituents but not the cap-weighted index, keeping a 7,100 year-end target that implies about 6% downside.
That caution comes as the S&P 500 ended May at a record high even though only a small group of stocks made new highs, while advance-decline measures also weakened.
Chip shares then sold off after Broadcom held AI revenue estimates steady, though Citigroup called the pullback healthy and kept Broadcom, Texas Instruments and Applied Materials as top picks.