Energy is a Long-term Buy, Tech is a Long-term Sell – BofA

Bank of America (NYSE:BAC) strategist Michael Hartnett has reflected on last weeks flows amid a strong rebound in the US equities despite rising rates.

In a week to Wednesday, equities attracted $18.9 billion with $12.2 billion going to cash. Moreover, $6.3 billion went into bonds while $400 million were inflows to gold.

Hartnett also noted the largest inflow to EM stocks and tech in 2 months – $5.1 billion and $3.1 billion, respectively.

Outflows from Japan and Europe were $1.5 billion and $4 billion, respectively.

In coming months recession risks will jump, Treasury yields & the US dollar will peak, junk bonds, EM, long-duration tech will rally at expense of banks, Hartnett said in a client note.

The BofA Bull & Bear Indicator is now at 2.1, up from 2.0, therefore ending 1-week contrarian “buy signal”.

Crypto were 1st signals in Q1’21 that inflation & rates shock coming, will be 1st signals in Q2’22 that recession & peak in yields imminent. Energy is a long-term buy, tech is a long-term sell and likely is worst performing sector in 2020s, Hartnett added.

By Senad Karaahmetovic

Disclaimer:Fusion Mediawould like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.