US stocks: BoA warns of summer stock rout as cash levels fall and bullish sentiment peaks

Bank of America’s May Fund Manager Survey warns US equities may face a summer selloff after average cash holdings fell from 4.3% to 3.9%, triggering a technical sell signal and leaving investor sentiment at a three-month high. Historically the 24 prior sell signals produced a median 1% market pullback; the depth of any decline will hinge on bond yields. The survey highlights complacency on rate risk (only 16% expect Fed hikes over 12 months despite 2-year yields at 4.1%), a belief that 30-year yields could reach 6%, record commodities overweight and deep bond underweight. Crowded long semiconductor positioning and oil supply fears (consensus year‑end ~$85/bl) add to downside risk. BoA flags contrarian opportunities in fixed income, the dollar, UK assets and beaten-up consumer stocks.