"Bank of America Chief Investment Strategist Michael Hartnett, one of the most respected voices on Wall Street, warned that most of the indicators he closely monitors were trading at or above the levels reached in March 2000, before the dot-com collapse. While the S&P 500 price-to-book ratio has fallen back somewhat from 5.1 in August to the current 4.7 level, even as stocks have skyrocketed over the past month to new all-time highs, the reality is that it is at 26 times trailing earnings."
"We decided to screen the BofA Securities stock research universe for companies that serve as proxies for the bond market. These include utilities, energy midstream companies, telecommunications companies, consumer staples, and net lease REITs, where the tenant assumes all property costs. Five top companies with stocks rated Buy at BofA Securities appear to be solid and safe ideas as we head into the final quarter of the year and on to 2026."
Most market indicators are trading at or above the levels reached in March 2000 before the dot-com collapse. The S&P 500 price-to-book ratio declined from 5.1 in August to 4.7, while the index trades at about 26 times trailing earnings, indicating historical expensiveness. Investors should consider defensive, income-producing sectors that act as bond-market proxies, including utilities, energy midstream, telecommunications, consumer staples, and net-lease REITs where tenants assume property costs. Screening identified five top companies rated Buy by BofA Securities that appear solid and safe heading into the final quarter and 2026. Diversification and multiple research inputs remain essential.
Read at 24/7 Wall St.
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