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You ain't seen nothing yet, warns top BofA strategistBubble brewing that rivals the roaring '20s, but bulls won't sell until these two things happenLast updated 30 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Even if an IPO wave signals a bubble it is not necessarily a sign of a market top. Photo by JOHANNES EISELE/AFP/Getty ImagesSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe concentration of tech stocks that has fuelled fears of a market bubble is about to get worse, warns a top strategist with Bank of America.The anticipated mega-IPOs of SpaceX, OpenAI and potentially Anthropic would push the market concentration of technology stocks in the S&P 500 to 48 per cent, said Michael Hartnett, investment strategist with BofA Securities.““Strong price action, retail mania, slumping vol … so bubbly,” Hartnett said in his weekly note The Flow Show. “Add mega IPOs to AI big boys and market concentration easily surpasses (~48%) bubbles of roaring ‘20s, Nifty 50 ‘70s, Japan ‘80s, TMT ‘90s.”Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againFor years analysts have been worrying about the dominance of the Magnificent Seven over America’s main stock indices. These tech giants — NVIDIA Corp., Microsoft Corp., Apple Inc., Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Tesla Inc. — have already pushed technology’s weighting on the S&P 500 to over 44 per cent, according to Bloomberg.The addition of “the Big Three” would push it well into bubble territory, said Harnett. The only historical peak it would not exceed is the 1880s railroad bubble, which hit 63 per cent.SpaceX has already filed for its initial public offering. The largest stock market debut in history, potentially valuing the company at US$1 trillion, could come as early as next month. OpenAI and Anthropic have yet to file, but are reportedly racing to launch their listings by the end of this year.Owen A. Lamont, senior vice president of Acadian Asset Management, calls high net equity issuance the “Third Horseman of the Bubble Apocalypse,” and argued this past March that it had yet to show up.However, if SpaceX, OpenAI and Anthropic all go public this year it could potentially add US$3 trillion in market cap to the public market which would amount to a 1999-sized IPO wave, he said.“In reality, if the Big Three go public, we’d also probably see hundreds of small fry joining in,” he said.Signs of this exuberance were already showing up after the market debut of semiconductor group Cerebras Systems Inc. earlier this month.The artificial intelligence chip designer raised US$6.4 billion in the largest semiconductor IPO in history and ended its first day of trading up 68 per cent, which put the start-up’s value at about US$70 billion, up there with General Motors, reported the Financial Times. Bankers told the FT fundraisings could hit record highs this year.Even if an IPO wave signals a bubble it is not necessarily a sign of a market top, said Lamont, as bubbles can last for years. For example, the Netscape IPO of August 1995 was a “watershed event” in the late 1990s tech bubble, but the markets didn’t peak until more than four years later.“Stock market bubbles are often heralded by specific IPOs which mark their beginning and not necessarily their end,” he said.This past week, Bank of America’s Bull & Bear Indicator rose to 8, triggering the “contrarian sell signal for risk assets.” The reading was driven by inflows into tech and emerging market bonds, a record monthly jump in the Fund Manager Survey’s equity allocation and drop in cash levels to 3.9 per cent.There have been 17 of these sell signals since 2002.However, Harnett said that bulls will not exit stocks until two things happen — the historic Big Three IPOs and Federal Reserve policy tightening after the U.S. consumer price index hits 4 to 5 per cent, which he expects in “coming months.”“Surge in bond yields [is] how booms/bubbles end,” he said. Sign up here to get Posthaste delivered straight to your inbox.High gas prices are putting the squeeze on Canadians’ spending in other areas, data out Friday revealed. Retail sales rose by 0.9 per cent in March, more than expected, but most of the gain was Canadians paying more at the pumps.Sales gained in four of nine sectors, led by a 12.4 per cent increase at gasoline stations and fuel vendors.Without, autos and gas, sales slipped 0.1 per cent and volumes were down 0.7 per cent.“Overall, it appears that higher gasoline prices may already be limiting sales in other areas, which will see inflation-adjusted consumer spending growth decelerate again in the second quarter,” Andrew Grantham, senior economist at Canadian Imperial Bank of Commerce, said in a report to investors.Earnings: Silvercorp Metals Inc.Peter, 49, wonders if he should use layoffs at his company as an opportunity for early retirement. A diligent saver since his first job, he has maxed out his tax-saving contributions every year. Now he asks FP Answers for help with a withdrawal strategy if he needs one. Find out moreInterested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors.Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.