Bank of America Merrill Lynch strategists are increasingly skeptical about what’s fueling the stock market run.
Instead of a diversified stock market portfolio, the firm recommends high-quality bonds and financial stocks as outperformers.
“Investors may be well served by locking in some profits in U.S. stocks,” BofAML told investors in a note.
The firm told clients this week that of the three pillars holding up the most recent leg of the eight-year bull market, two are wobbling. Only low bond yields are still in place.
The other two pillars, accommodative central bank policies and earnings growth, are fading.