By Senad Karaahmetovic
Michael Hartnett, Bank of America’s Chief Investment Strategist, remains a “tactical bear” as he expects the to dip well below the June low and fresh YTD lows printed earlier this week.
The strategist sees S&P 500 falling to the 3300s to force a “policy panic” before staging a meaningful rally.
“SPX 666 (GFC low) to 3333 (QE bull high) to 2222 (COVID) to >4444 (QE supernova) to 3333 (bond bear); we nibble 3600, bite 3300, gorge 3000,” Hartnett wrote in a client note.
Hartnett added that , in his eyes the “best Wall St barometer,” broke down below the key support at 14000.
““Big Low” not ‘til Q1 when recession/credit shocks = “peak Fed”, “peak yields”, “peak US$”; trade of ‘23 short $, long EM, small cap, cyclicals,” he added.
As far as weekly flows are concerned (for the week that ended on Wednesday), inflows to equities were $7.6 billion while outflows from bonds were $13.7 billion. Hartnett also noted that the UK equity outflows are on pace for the worst year ever ($18 billion).
