Bank of America warns stock market bulls to rein in aggressive buying behavior

According to Odaily, the latest fund manager survey by Bank of America shows that global investors aggressively buying stocks should consider reducing their exposure. The bank’s strategists point out that asset allocators have become extremely bullish—usually a warning sign for the market. The proportion of investor cash holdings has dropped from 4.1% last month to an “extremely low” 3.6% of assets. Meanwhile, US stock positions are at their highest level since December 2024, with a net overweight of 24%.

The team led by Michael Hartnett wrote in the report: “Bank of America’s ‘Bull & Bear Indicator’ reads as high as 9.4 (on a scale from 1 to 10), which is in the extremely bullish range. This suggests that exposure to stocks and high-beta assets should be reduced. Because market positioning is overly optimistic, the upside for risk assets this summer will be limited.”