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BofA’s Hartnett Says Stocks Are Close to Setting Off Sell Signal.

watchlist :: 2025-06-06 :: source - bloomberg

By Sagarika Jaisinghani

BofA’s Hartnett Says Stocks Are Close to Setting Off Sell Signal. Bloomberg

(Bloomberg) -- Global stocks are close to triggering a sell signal as both fund inflows and the market breadth are running too hot, says Bank of America Corp. strategist Michael Hartnett.

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He cited a data point that stock and high-yield bond inflows have totaled 0.9% of fund managers’ overall assets in the past four weeks. In his view, investors should sell if the ratio increases to more than 1%.

At the same time, about 84% of country indexes are trading above their 50- and 200-day moving averages, suggesting the market is in overbought territory, Hartnett said.

Global equities hit a record high this week on optimism around US-China trade negotiations and as robust economic data eased recession fears in the US. The focus later on Friday is on the US jobs report as investors look for confirmation of a healthy labor market.

In terms of flows, global equity funds have attracted about $515 billion so far this year, tracking their second-biggest inflows on record, according to the weekly Bank of America note citing EPFR Global data.

Hartnett has recommended international equities over US stocks, adding that the S&P 500’s rebound is not supported by earnings growth. The index closed Thursday at 5,939.30 points, about 3% below its February record.

--With assistance from Michael Msika.

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