The latest from BofA’s excellent Michael Hartnett.
Year Ahead 2023: we stay bearish risk assets in H1, set to turn bullish H2 as narrative shifts from inflation and rate ‘shocks’ of ’22 to recession and credit ‘shocks’ in H1’23; long bonds H1…hard landing, long stocks and bonds H2…peak Fed; maintain SPX nibble at 3.6k, bite at 3.3k, gorge at 3.0k entry points; trades: long UST 30-yr, gold, China,copper, industrials, small cap; short US$, tech, PE; barbell credit.
The Biggest Picture: flows in the 2020s…equities ($1.3tn) and cash ($1.3tn) the big winners…equities have seen big inflows relative to bonds ($0.6tn)and credit ($0.4tn)…trend continuedin‘22(Chart 2).
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