Overview
- In a June 5 research note, Bank of America Global Research said 70% of its historical bear‑market signposts for the S&P 500 have activated, a threshold the team links to prior market peaks.
- The bank finds the S&P 500 is “statistically expensive” on 17 of 20 valuation measures even as forward earnings estimates have pushed the index’s forward P/E down to about 20.77 from 22.18 at the start of the year.
- Megacap technology and AI names have driven roughly a 9% year‑to‑date gain for the index, and within information technology the gap between top and bottom performers is the widest since February 2000.
- BofA reiterated a year‑end S&P 500 target of 7,100, which implies about 4.5% downside from recent levels, and advised investors to take profits and favor selective, stock‑level choices over broad cap‑weighted exposure.
- The note also cites weakening consumer loan demand in the Federal Reserve’s Senior Loan Officer survey as an added caution, a signal that institutional investors may weigh against still‑positive earnings revisions in some sectors.