© Reuters. BofA’s Top Indicator Back to Extreme Bearish, ‘Bullish Factor for Credit/Stocks’ says Strategist
By Senad Karaahmetovic
The Bank of America data shows that outflows from equities in the week to Wednesday were $14.5 billion. According to the bank’s Chief Investment Strategist, Michael Hartnett, there have been no net inflows to stocks in the past 6 months.
“Mass inflow to stocks Nov ’20-Feb ‘22 has ended,” Hartnett said in a client note.
The strategist also took note of the largest outflow from Tech since January 2019, while European stocks witnessed the 30th week of outflows in 2022.
Elsewhere, outflows from gold were $200 million, from bonds $1.9 billion, and from cash $4.3 billion.
“5-year Treasury yield 3.4% now double 1.65% dividend yield.; oil breaking down, utilities back at highs, EM debt not at new lows, HY rallying, biotech rallying…good news markets are hinting cyclical “peak yields” next 3-6 months,” wrote Hartnett in his regular weekly note.
In the meantime, the Bank of America Bull & Bear Indicator is back to 0.0 after rebounding to 0.4 last week. The move lower is a result of “worsening equity breadth, deteriorating HY and EM debt flows, weaker credit technicals.”
“Extreme bear sentiment/positioning remains most bullish factor for credit/stocks,” Hartnett concluded.
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