Bank of America bull and bear indicator rises to 9.6, highest since December 2020
The sentiment gauge points to unusually strong investor risk appetite and now stands at its third-highest level in 24 years, helped by a drop in fund managers’ cash allocations.
Fact Check
The originating Kobeissi Letter post and an independent analyst (Neil Sethi) citing BofA's Michael Hartnett both report the Bull & Bear Indicator at 9.6, described as the highest since December 2020. Details align across sources: 3.6% fund manager cash allocation, 5 of 6 components bullish with only breadth neutral, and the sell-signal context. Sethi's phrasing 'joint highest (with February) since December 2020' is fully consistent with 'highest since December 2020.' The claim's description of the composite gauge is accurate. No conflicting evidence found. Slight residual uncertainty remains because the underlying BofA Flow Show report itself was not directly retrieved.
Summary
Bank of America’s Bull & Bear Indicator rose to 9.6 on July 23, its highest reading since December 2020 and the third-highest level in 24 years, signaling extremely optimistic market sentiment. The gauge combines flows into stock and bond funds, hedge fund and fund manager equity positioning, credit-market conditions, and market breadth to track overall investor risk appetite. The latest increase was driven mainly by fund managers’ cash allocations falling 0.5 percentage points from a month earlier to 3.6%, near a 13-year low.
Terms & Concepts
- Bull & Bear Indicator: A Bank of America market sentiment gauge that combines multiple measures of investor risk appetite.
- fund flows: Money moving into or out of investment funds, often used to assess investor demand.
- market breadth: A measure of how broadly a market move is shared across securities.