by Michael Hartnett, Chief Investment Strategist, BofA Securities – Global Research
Summary
- Crypto leads with 78.5%, while stocks and gold follow with 17.6% and 7.9% YTD returns, respectively.
- Fastest nominal GDP recovery since WW2; 10-year yields threaten 3.6-4.1% Goldilocks range.
- Bank of Japan's significant role in setting global rates past 30 years; set to tighten and expand YCC range.
- Magnificent 7 stocks up 2x, representing nearly 30% of S&P 500; monopolistic tech dominant.
- Weekly flows: $40.6bn to cash, $13.8bn to stocks, $11.0bn to bonds, $0.5bn from gold.
- Notable inflows to cash, TIPS, tech, and materials; outflows from Japan.
- BofA Private Clients: $3.3tn AUM, largest buying of bonds in 8 weeks, largest outflow from stocks in 9 weeks.
- BofA Bull & Bear Indicator rises to 4.0, signaling bullish sentiment; cash allocation remains a drag.
- Asset price overshoots amid heavy policy stimulus, lowest rates in 5000 years, and fastest nominal GDP recovery.
- US Consumer trends show mixed signals; real retail sales falling, saving rate rising, unemployment rate remains low, and recessionary trends emerging.
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