BofA strategists led by Michael Hartnett say investor bullishness has reached
extreme levels and recommend trimming risk exposure. The bank’s bull‑bear index
rose from 9.4 to 9.7, its highest since 2021. They attribute the optimism to
broader equity gains, heavy inflows into high‑yield bonds and tighter credit
spreads. The team favors defensive assets to shield portfolios from potential
shocks to the economy, monetary policy and the AI cycle. Hartnett said: "We're
still in a summer 'withdraw/rotate', not 'add back' stage." He advises reducing
risk allocations or rotating into defensive assets, long‑duration bonds and the
dollar.
