Bank of America Warns 70% of Bear Market Signals Triggered in S&P 500

According to Bank of America Securities, on June 5, approximately 70% of bear market signals have already been triggered, in line with historical averages at market peaks. In a report led by strategist Savita Subramanian, the bank noted that 17 of 20 valuation metrics for the S&P 500 show statistically elevated valuations, with 8 of these indicators exceeding levels seen during the dot-com bubble.

The index's strong performance is masking severe internal dispersion. High P/E stocks have significantly outperformed undervalued ones, which the strategists characterize as a sign of excessive speculation. Within the technology sector, the gap between the best and worst-performing quintiles has expanded to its highest level since February 2000, according to the report.