(Bloomberg) — Investors are getting so bullish that it might be time to sell global stocks, according to an investor survey by Bank of America Corp.
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Allocations to stocks surged, while bond exposure sank and cash levels in global portfolios fell to 3.9% in October from 4.2% last month, triggering a “sell signal” on global equities, strategists led by Michael Hartnett wrote on Tuesday.
The October survey showed “the biggest jump in investor optimism since June 2020 on Federal Reserve cuts, China stimulus, soft landing,” Hartnett and his team wrote. Equity allocations nearly tripled from last month, to a net 31% overweight. Bond allocations saw a record swing to a net 15% underweight.
Since 2011, there have been 11 similar sell signals, with global equities dropping 2.5% over one month on average and 0.8% in the three months following the trigger. “Froth is on the rise” but BofA’s Bull & Bear…
