BofA Reports Worst Equity Breadth Since 2009, Bull & Bear Indicator Drops to 5.5

Bank of America (BofA) reports that equity market breadth is at its worst since March 2009, as AI investments crowd out Wall Street and Main Street dollars. The 2020s have been characterized as a series of challenging trades, with the next anticipated shift being value stocks outperforming growth stocks due to slowing economic growth. A benign April PCE of less than 0.2% is unable to support the wobbly tech sector. Despite this, BofA's proprietary growth indicators show that 82% are signaling Bullish/Neutral, near 30-month highs, as global growth shifts from the US to Europe and Asia Pacific without reversing disinflationary trends. Additionally, BofA's Bull & Bear Indicator has dropped to 5.5 from 5.6, driven by worsening equity market breadth and emerging market stock outflows, offset by lower FMS cash levels. Hartnett notes measures of growth continue to point to healthy economic activity.