Bank of America Urges Cutting Equity Exposure as Bull-Bear Indicator Hits 9.4
Updated
Updated · CNBC · Jul 14
Bank of America Urges Cutting Equity Exposure as Bull-Bear Indicator Hits 9.4
3 articles · Updated · CNBC · Jul 14
Summary
Michael Hartnett told investors to trim stock exposure, especially high-beta shares, after Bank of America’s bull-and-bear indicator reached 9.4 — an “extremely bullish” level he views as a contrarian sell signal.
That warning rests on the idea that crowded optimism leaves fewer new buyers, even as investors bet strong AI spending and a dovish Federal Reserve will drive the next leg of the bull market.
The rally has largely stalled since early June as gas-price signals, doubts about future AI profits and uncertainty over monetary policy kept investors waiting for a fresh catalyst.
Second-quarter earnings could provide that catalyst: FactSet expects S&P 500 profit growth above 20% for a second straight quarter, though skeptics warn spending is being deferred and inflation risks could rise if U.S.-Iran tensions worsen.
June consumer-price data came in softer than feared, helping major indexes trade higher Tuesday, but Bank of America’s call underscores how stretched sentiment has become.