'3600 is the New Bull Case': Outflows from Energy and Materials Highest in Several Years - BofA

May 20, 2022 6:11 AM EDT
Get Alerts SPY Hot Sheet
Price: $388.30 -0.46%

Rating Summary:
    0 Buy, 0 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 18 | New: 23
Trade Now! 
Join SI Premium – FREE

Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.

In a client note titled “3600 is the new bull case” (heard on the Street), Bank of America strategist Michael Hartnett has reflected on flows in a week to Wednesday.

The bank calculates that the stock market dropped by 1 US economy in 6 months. BofA’s Bull & Bear Indicator is now at 1.5, which is a clear contrarian “buy: signal. The BofA Global Breadth Rule is also in the contrarian "buy" signal territory.

“Markets are great storytellers…the story of 2022 is "inflation shock = rates shock = recession shock"; the larger story of the 2020s is regime change, higher inflation, higher rates, higher volatility, & lower asset valuations, driven by trends in society (inequality), politics (populism/progressivism), geopolitics (war), environment (net-zero), economy (de-globalization), demographics (China population decline), all inflationary, all favor cash, commodities, real assets, volatility, small cap, all damage bonds, credit, private equity, tech stocks,” Hartnett said in a client note.

As far as flows are concerned, investors pulled $1.4 billion from gold, $5.2 billion from equities, $7.6 billion from cash, and $12.3 billion from bonds.

Looking at the sectors, the market saw the most significant outflows from energy and materials since 2016 and 2014, respectively.

By Senad Karaahmetovic

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Hot Comments, Hot List, Trader Talk

Related Entities

BofA/Merrill Lynch, Senad Karaahmetovic