Bank of America sees no sign of a major peak in risk assets despite investor confidence climbing close to historically elevated levels. The bank's Bull & Bear Indicator rose to 8.9 in June, triggering a technical sell signal, but strategist Michael Hartnett noted cash allocations edged higher to 4.1 percent from 3.9 percent in May, suggesting investors have not become fully committed to risk. Hartnett said this is not a big top for risk assets, adding that any significant market peak will be signaled by bonds and voters. The survey showed growth and earnings expectations at three-month highs, while expectations for rising rates hit their highest since September 2022 and 40 percent of fund managers now anticipate Federal Reserve rate increases within the next year, up from 16 percent. Global equity overweight positions declined from 50 percent to 38 percent and technology exposure fell from 33 percent to 26 percent, while investors increased exposure to Japanese equities, materials, and banks. The most crowded trade remains long global semiconductor stocks, identified by 80 percent of respondents, the highest reading ever recorded.
Bank of America CorpBofA's own Bull & Bear Indicator triggers a sell signal, but strategist says no major peak; mixed implications for the bank's research credibility.