Bank of America: Tech stocks are one bad non-farm payroll report away from "collapsing"

The US economy continues to cool, potentially further weakening the rise of tech stocks. Recently, Bank of America analyst Michael Hartnett stated in a new report that signs of economic slowdown will drive investors to shift away from tech stocks to other stocks, while remaining optimistic about the bond market in the second half of the year. The report indicates that recent data suggests a global economic slowdown, leading to a gradual loss of dominance by large-cap tech stocks: "We are one bad non-farm payroll report away from tech losing leadership." Amid rising expectations of rate cuts and concerns about AI returns, funds are moving from large-cap tech stocks to small-cap stocks. Market data shows that since the historical peak on July 10th, the market capitalization of companies in the Nasdaq 100 index has evaporated by $2.6 trillion. However, the report states that market bulls still believe that this pullback is "healthy" as the market has not broken key support levels. The Nasdaq 100 index has fallen by about 9% since July 10th but has still risen by over 30% since its low point in October last year. As of the week ending on July 24th, Bank of America's Bull & Bear Indicator slightly rose to 6.9, reaching its highest level in over three years. Generally, when this indicator reaches 8, it indicates that the market has "overheated," triggering a "sell signal." Hartnett mentioned that if fund managers increase their stock allocations, cash levels decrease further, and the rebound of lagging stocks improves market breadth, it will trigger this signal