BofA's Risk-Love Indicator Hits 13-Month High — 'Market Sentiment Is Through The Roof'
Bank of America's Global Equity Risk-Love indicator has reached a 13-month high of 1.4, indicating a significant increase in investor risk appetite. This level of market sentiment has only been higher 7% of the time since 1987. Analysts, including Ryan Detrick and Tom Lee, suggest that the current bull market, which began in October 2022, could extend through 2035, driven by strong demographic trends and technological advancements. However, caution is advised regarding future predictions, particularly about the Fed Funds Rate.
Global equity market sentiments have surged to levels not seen in over a year, according to the latest figures put out by Bank of America’s global research team.
Global Market Sentiments Soar
On Monday, in a post on X, The Kobeissi Letter shared BofA’s Global Equity Risk-Love indicator, which considers several metrics to quantify how much investors “love” or “fear” global equity markets at any given time.
The post notes that this indicator has “jumped to 1.4, its highest in 13 months,” marking a sharp turnaround from just four months ago when the metric hovered around negative 1.0. This essentially indicates an elevated risk appetite among investors across global equity markets.
According to the post, the indicator’s current level is historically rare, noting that “since 1987, sentiment has only been higher 7% of the time,” having hit similar levels for brief periods recently, such as during the aftermath of the 2020 COVID-19 crash.
“Market sentiment is through the roof,” the post concludes, while also subtly highlighting periods of consolidation and heightened activity that often follow such euphoric highs.
Analyst Predicts Bull Market Through 2035
While this data shows cause for concern in the near-term, leading analysts such as Carson Group‘s Ryan Detrick believe there is a case for an extended bull market.
According to Detrick’s research, going back 5 decades, bull markets lasting into their third year typically continue for at least five years total. The S&P 500, tracked by the SPDR S&P 500 ETF Trust SPY, he notes, has been in a bull market since October 2022.
Head of Research at Fundstrat Global Advisors, Tom Lee, predicts that the current bull market will last through 2035, driven by what he sees as strong demographic trends and transformative technologies, including artificial intelligence and blockchain.
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