Strategists Predict "The Great Rotation"
Tweet
Share
E-mail
Equity strategists at Bank of America Merrill Lynch described investors mood using a single word, "bipolar". The mental disorder is characterized by mood swings ranging from the frenzied state known as mania, to depression and despondence, which sounds about right considering recent market performance.
With all the fuss looming over the fiscal cliff drama, BofA analysts think investors could be missing a key trend reversal they are calling The Great Rotation.
"Below the rosy investment grade façade, there have been three notable sector trends that corroborate the stealth rotation story of 2012, in our view. The winners of the past five years have had a much tougher time this year, while the losers of the past five years have thrived," said strategists.
They continued by saying the recent shifts out of technology and consumer staples into financials "hints more strongly that the stealth rotation of 2012 will be followed by The Great Rotation in 2013."
Against this backdrop, BofA expects rotation out of bonds into equities. They are bullish on equities and credit, bearish on bonds and neutral on commodities over the next 3 to 6 months.
With all the fuss looming over the fiscal cliff drama, BofA analysts think investors could be missing a key trend reversal they are calling The Great Rotation.
"Below the rosy investment grade façade, there have been three notable sector trends that corroborate the stealth rotation story of 2012, in our view. The winners of the past five years have had a much tougher time this year, while the losers of the past five years have thrived," said strategists.
They continued by saying the recent shifts out of technology and consumer staples into financials "hints more strongly that the stealth rotation of 2012 will be followed by The Great Rotation in 2013."
Against this backdrop, BofA expects rotation out of bonds into equities. They are bullish on equities and credit, bearish on bonds and neutral on commodities over the next 3 to 6 months.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Greenbrier Companies (GBX) PT Lowered to $42 at BofA Securities
- Trump's $1.2 billion D.C. spending spree fans fiscal fears as yields surge
- Jersey Mike's files for IPO, plans NYSE listing under ticker JMKE
Create E-mail Alert Related Categories
Analyst Comments, Insiders' BlogSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
