‘Summer of Volcker’: No Big Low in Stocks Before Big High in Yields and Inflation – BofA’s Hartnett
2022.06.14 14:37
‘Summer of Volcker’: No Big Low in Stocks Before Big High in Yields and Inflation – BofA’s Hartnett
By Senad Karaahmetovic
The Fund Manager Survey (FMS) results for June point toward a “deeper investor mystery” with the BofA Bull & Bear Indicator down to as low as 0.2, according to the bank’s top investment strategist Michael Hartnett.
“Wall St sentiment is dire but no big low in stocks before big high in yields & inflation, and the latter requires uber-hawkish Fed hikes in June & July,” Hartnett wrote in a client note.
FMS showed that investors’ optimism on global growth is at record lows with the stagflation fear at the highest since June 2008. The survey also showed that CIOs are advising CEOs to “play safe” with 44% wanting stronger balance sheets, 30% look for capex and 18% want buybacks.
“Net 79% expect higher short rates…compared with prior market lows when net 53% (average) expected lower rates; what makes Fed pause/pivot? PCE inflation 300k say 20%, SPX
