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Michael Hartnett, Bank of America’s Chief Investment Strategist, remains a “tactical bear” as he expects the S&P 500 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 NYSE Composite Index, 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).
