BofA's Hartnett Warns of Bubble Signals, Points to June Event Cluster as Potential Trigger

Bank of America Securities strategist Michael Hartnett warned on May 31, 2026, that equity markets are flashing bubble signals, with June poised to trigger a sell-off as multiple risk events cluster. Only 4% of S&P 500 stocks are at record highs, while 222 have fallen over 20% from peaks, mirroring dot-com era extremes. The firm’s Bull & Bear Indicator hit 8.5, near record, and its global breadth gauge nears overbought—a signal that since 2002 preceded average 2-3% global equity declines in 2-3 months, with max 15-20% drawdowns. The June calendar: CPI (June 10, expected 4% YoY), ECB (June 11), G7 (June 15), BOJ (June 16), Fed meeting under new Chair Walsh (June 17), UK by-election (June 18), and heavy equity issuance. Hartnett’s post-crash playbook: buy bonds, rotate into lagging defensives (consumer staples, financials, healthcare), and short overvalued growth. He also favors small-cap tech for AI adoption, oil-sensitive consumer sectors, India, Europe, and low-leverage asset managers to capture distressed opportunities.