Wall Street’s Cash Pile Shrinks to 3.9%, Flashing BofA’s Sell Signal Ahead of June

Wall Street’s piggy banks are starting to look suspiciously light, and that’s making Bank of America nervous. The bank’s latest Fund Manager Survey shows cash levels fell from 4.3% to 3.9%, the sharpest drop since February 2024. Anything below 4% has historically flashed a contrarian sell signal, with BofA strategist Michael Hartnett warning stocks are now a “chip shot” away from rolling over.

• Only 16% of managers expect Fed rate hikes over the next 12 months, even as nearly two-thirds see the 30-year Treasury yield climbing to 6%.
• Wall Street’s most crowded trade is long semiconductors at 73%, while commodity overweights hit a record, and bond positions stay deeply underweight.

The plot thickens: Hedge fund Situational Awareness disclosed huge bearish bets on chip names, including $1.56B in NvidiaNVDA

puts, more than $2B against the VanEck Semiconductor ETF, and billion-dollar positions targeting OracleORCL

and BroadcomAVGO

. Similar caution has shown up previously, including Michael Burry’s standing Nvidia short. Add inflation as the biggest tail risk along with Strait of Hormuz disruptions, and the path to a summer wobble starts to look more paved.