Core Viewpoint - Bank of America’s chief investment strategist Michael Hartnett indicates that nearly all proprietary trading signals have issued sell signals, despite a record bullish reversal among fund managers following three months of panic selling [1] Group 1: Sell Signals - The cash rule from Bank of America’s fund manager survey shows that cash as a percentage of assets under management (AUM) is at 3.9%, reaching sell signal levels. Historically, similar sell signals have led to an average decline of 2% in the S&P 500 index [2] - The global breadth rule indicates that 64% of MSCI global stock index components are trading above their 50-day and 200-day moving averages, down from 80% last week, but not yet at the 88% sell signal threshold [2] - The global fund flow trading rule shows that inflows into global stocks/high-yield bonds account for 0.9% of AUM over the past four weeks, down from 1.0% last week, triggering a sell signal [2] Group 2: Market Conditions - Hartnett suggests that those looking for sell triggers should focus on the bond market rather than the stock market, emphasizing that "bears watch bonds, bulls watch stocks" [2] - The 30-year U.S. Treasury yield remains at a critical level, having briefly surpassed 5% during a mini-panic when the market speculated on Trump firing Powell. However, as long as yields do not reach new highs and the MOVE index stays around 80, the market maintains a "risk-on" status [2][3] Group 3: Economic Indicators - If long-term Treasury yields reach new highs and the MOVE index exceeds 100, Hartnett will shift to a "risk-off" stance [3] - The current market breadth is collapsing, with the equal-weighted S&P 500 to S&P 500 ratio at a 22-year low, the Russell 2000 to S&P 500 ratio near a 25-year low, and the value to growth stock ratio at a 30-year low, indicating a potential economic slowdown or stock market bubble [3] Group 4: Historical Context - Hartnett draws parallels between the current situation and the early 1970s, referencing Nixon's economic policies and the Fed's rate cuts, which contributed to a boom-bust cycle. He notes that after initial market sell-offs, the S&P 500 rose 11% a year later, suggesting that history may repeat itself if Powell is removed [4]

Group 1 - The recent sell-off in U.S. stocks, bonds, and currency has paused, but market participants remain tense, anticipating potential renewed selling [1][3] - The U.S. dollar's depreciation trend has been halted, with the dollar index recovering from around 97 to the 99 range [1] - The "MOVE index," which reflects expected volatility in the U.S. bond market, remains high at around 105, indicating ongoing market uncertainty [4] Group 2 - The S&P 500 index rose to 5525.21 points, surpassing the previous two-day high, yet the VIX index remains elevated at 24.8, suggesting continued market apprehension [6] - Many investors predict a recession in the U.S. within the next year, despite the stock market not yet reflecting this downturn [6] - The upcoming U.S. employment data on May 2 is deemed extremely significant, as it may influence Federal Reserve interest rate decisions [6][7] Group 3 - The Federal Reserve's interest rate cut expectations for May are around 10%, with June's expectations at about 60%, indicating a cautious outlook [7] - The Bank of Japan is expected to maintain its policy rate, with no immediate changes anticipated unless trade negotiations progress [8]