BofA: Markets 3-5% Away From Major Buying Opportunity
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Michael Hartnett said markets haven't fully capitulated but are approaching a buying opportunity, with BofA's key trigger being the point at which 88% of global equity indices are simultaneously trading below their 50- and 200-day moving averages — a level derived from rigorous back-testing.
- The S&P 500 has already reached the 88% threshold, but global markets still need to drop another 3% to 5% before the full capitulation signal flashes, according to BofA's strategy team.
- BofA's March fund manager survey showed cash weightings rising from a 2026 low of 3.2% to 4.2%, and Hartnett flagged that a move to 5% cash could independently signal it's time to add risk back into portfolios.
- Hartnett laid out three specific trade calls: sell the dollar index above 100, buy the 30-year Treasury at a 5% yield, and go long the S&P 500 if it dips below 6,600 — a level the index nearly hit on Thursday before the article's publication.
- The current correction accelerated in March but traces back to October, when the Fed was cutting rates with stock markets at their highs; capitulation is now visible in bitcoin, software stocks, the Magnificent Seven, gold, precious metals, semiconductors and emerging markets.
- Bank of America outlined three themes for the second half of the 2020s: a commodity bull market broadening from gold into metals and energy, a tilt toward international and U.S. mid-cap stocks over leveraged large-caps, and contrarian consumer stocks positioned to benefit from populist policies aimed at lower-income voters.
Why it matters: Hartnett's roadmap gives investors concrete entry points: a 3-5% global drop or S&P 500 below 6,600 would signal a major buying opportunity. But with Brent crude up two-thirds year-to-date amid the war in Iran, he warns no new summer highs if the conflict ends without a Trump approval bounce.
