Double indicators signal a red light! Bank of America strategist: It's time to sell stocks
Bank of America strategist Michael Hartnett pointed out that the inflow of funds into global stock markets and market breadth indicators are overheating, which may trigger a sell signal. Data shows that the net inflow of stocks and high-yield bonds over the past four weeks accounted for 0.9% of total assets under fund management, and if it breaks through 1%, consideration should be given to reducing positions. About 84% of national stock indices have broken through the 50-day and 200-day moving averages, indicating that the market has entered an overbought zone. Hartnett suggests focusing on international market opportunities outside of U.S. stocks, as the rebound of the S&P 500 lacks earnings support
According to the latest research report by Bank of America strategist Michael Hartnett, the current inflow of funds into global stock markets and the breadth of the market indicators are both showing signs of overheating, which is about to trigger a sell signal.
Data shows that in the past four weeks, the net inflow of stocks and high-yield bonds has accounted for 0.9% of total assets under management. Hartnett emphasized that if this ratio breaks the 1% threshold, investors should consider reducing their positions and exiting.
Technical indicators are also issuing warnings: about 84% of national stock indices have broken through the 50-day and 200-day moving averages, indicating that the market has entered an overbought zone.
Hartnett suggests that investors should pay more attention to international stock market opportunities outside of the U.S., as he believes that the current rebound of the S&P 500 lacks earnings support—this index closed at 5,939.30 points on Thursday, still 3% below its historical peak in February.
This week, global stock markets reached historic highs driven by optimistic expectations for U.S.-China trade negotiations and strong U.S. economic data alleviating recession fears. Market focus has now shifted to the U.S. non-farm payroll report set to be released on Friday, as investors seek evidence of a healthy labor market.
According to Bank of America's weekly report citing EPFR Global data, global equity funds have attracted approximately $515 billion in inflows so far this year, likely setting a record for the second-highest annual inflow in history
