BofA Warns of Rising Risk in US Stocks, Urges Investors to Take Some Profits
Summary
- Bank of America said rising signs of peak risk in U.S. stocks have led it to recommend some profit-taking.
- BofA said about 70%% of its bear-market warning indicators have been triggered, while citing elevated valuations across the U.S. stock market and rising speculative trading as risk factors.
- BofA maintained its year-end S&P 500 target of 7,100 while stressing the need for a cautious approach to the broader market.
Forecast Trend Report by Period
Bank of America said warning signs are mounting that U.S. stocks may be nearing a peak, and urged investors to take some profits. The call comes as markets debate whether the recent rally has left equities overheated.
Walter Bloomberg reported on June 8 that BofA said in a report about 70% of its bear-market warning indicators had been triggered.
The bank said that level has historically resembled patterns seen near major market tops.
It also cited elevated valuations across the U.S. stock market and an increase in speculative trading.
BofA said the recent concentration of gains in a small group of large-cap stocks was another risk factor.
Still, the bank said stock-specific opportunities remain.
BofA maintained its year-end S&P 500 target of 7,100, while emphasizing that investors should take a cautious approach to the broader market.
Market participants say expanding investment in artificial intelligence and improving corporate earnings are supporting stocks. At the same time, high valuations and overheated sentiment are increasing the risk of a short-term pullback.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
