Given that the small cohort of large companies we generally refer to as “mega-tech” is responsible for almost all of this year’s US equity rally, it comes as no surprise that “long tech” is once again the most crowded trade on the planet.

The bull case for US shares this year is also the bear case. The prospect of less aggressive monetary policy, lower yields and the perceived safety of quality companies with good balance sheets, bolstered the mega-caps which in turn boosted the US benchmarks they dominate. Now, though, the rally has become so narrow that many worry it’s poised to tip over.

Investors are the most long growth stocks versus value stocks since the summer of 2020, when the stay-at-home boom created a bonanza in tech and related shares. According to the May installment of BofA’s closely-watched Global Fund Manager Survey, a net 6% of panelists think growth will outperform value, the most since July of 2020.

As the bank’s Michael Hartnett wrote, survey respondents “have said only twice since September of 2020 that growth would outperform value.”

This is part and parcel of the broader shift towards Fed easing bets predicated on a variety of concerns, from banking stress to the generalized contention that the economy is poised to decelerate and can’t continue to shrug off the drag from 500bps of Fed hikes.

Note that the Nasdaq rally is narrowing all the time, at least on some measures.

The same thing is, of course, true for the S&P. And for the same reasons.

The new “most crowded trade” list in the BofA poll found “long tech” reigning for a second month, with “short US banks” running on its heels.

Note that “long T-bills” made the list, as did “short USD.” The Chinese economy’s lackluster performance has likely curbed investor enthusiasm, pushing “long Chinese equities” into a distant sixth spot.

“Allocations to technology jumped 14ppt MoM to a net 16% overweight, the highest allocation since December 2021,” BofA’s Hartnett noted, adding that the “flight to safety” preference triggered by the regional bank turmoil saw tech allocations jump 22 points since March, the largest two-month increase since the onset of the post-GFC bull market in March 2009.