Key insights
- The BofA May Fund Manager Survey indicates a significant shift towards equity overweight, with allocations jumping to a record 50% and cash levels dropping below historical turning point thresholds. This, coupled with a majority concern over CapEx overinvestment, suggests a potential market top is near, signaling a bearish outlook for US equities as investor sentiment becomes overly bullish.
I did a quick read of the BofA May 2026 Fund Manager Survey coverage, so you don't have to. Here are some interesting points that didn't get as much attention:
- Cash levels dropped to 3.9%, which is below the threshold historically associated with market turning points. * In one month, equity allocation jumped from being 13% overweight to a worrying 50% overweight – this was the largest move on record since 2001. * According to Hartnett, the market is just a "chip shot" away from triggering a sell signal.
The concern about CapEx overinvestment became a majority view in November 2025, marking the first time this has happened since 2005. By February 2026, it had reached new highs.
Let me know if anyone wants more specific discussion of any of the figures mentioned in the sources -- Reuters May 19, Bloomberg May 19.