Bank of America is warning that market euphoria has reached levels that could leave investors vulnerable to a pullback, with its proprietary sentiment gauge approaching an extreme reading last seen in 2021.
The bank's Bull & Bear Indicator rose from 9.4 to 9.7, nearing its maximum reading of 10 and marking its highest level since 2021. The increase reflects strong equity momentum, heavy credit inflows and tighter spreads across global markets.
- Indicator climbed from 9.4 to 9.7
- Approaching the maximum possible reading of 10
- Highest level recorded since 2021
- Driven by equity momentum, credit inflows and tighter spreads
The Bank of America market warning comes as global equities trade near record highs, suggesting the risk-reward balance may be becoming less attractive despite the ongoing rally.
Source: Finbold
