(Aug 16): Money managers who’ve watched the surge in corporate profits take US equities to records are starting to fret about earnings growth, and that’s an “ominous” sign, Bank of America says.

Just 33% of managers in the bank’s latest survey say corporate profits profits will improve, down from 58% at the start of the year.

The drop represents a “warning sign for equities over bonds, high yield over investment grade, and cyclical sectors over defensive ones,” chief investment strategist Michael Hartnett wrote in a note Tuesday. “Further deterioration is likely to cause risk-off trades.”

At the same time, a record 46% said equity markets are overvalued. Still, positioning by managers is “pro-risk” despite persistently high cash levels. The S&P 500 trades just above 21 times trailing 12-month earnings after touching above 22 in March, about 23% higher than the 10-year average.