BofA Says Drop in US Tech Could Be Next Pain Trade for Equities
- Investors underweight value and overweight growth face risks
- US stock market breadth is the weakest since 2009, data show
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Investors betting that technology behemoths will continue to fuel the rally in equities could be in for a rough ride when other sectors start to catch up, according to strategists at Bank of America Corp.
The outperformance of value over growth stocks as market breadth improves could be the next “pain trade” for investors, strategists including Michael Hartnett and Elyas Galou wrote in a note. Other potential sore points on the horizon include a drop in US equities and a widening in investment-grade bond spreads, Galou said by email.