B of A bank just announced: Stop buying our stock, in a BEAR MARKET it’s just gonna make it worse… via /r/wallstreetbets #stocks #wallstreetbets #investing


B of A bank just announced: Stop buying our stock, in a BEAR MARKET it’s just gonna make it worse…

The recent recovery in stocks may be short-lived, according to Bank of America Securities, which sees a bear market setting in through 2022 and suggests that investors tilt to cash and commodities.

BofA laid out a witches’ brew of negative trends, signals, and data points in a note published Thursday by chief investment strategist Michael Hartnett and his team. “If it walks like a bear…” it probably is, they write.

More than 75% of stocks in the Nasdaq Composite Index and 51% of S&P 500 stocks are already in a bear market—down more than 20% from peak prices, Hartnett notes. The outlook is worsening with geopolitical risks exacerbating potential for inflation, higher commodity prices, and “shocks” to growth.

Negative real interest rates, adjusted for inflation, are another ominous sign. Going back 250 years, negative rates have been “synonymous” with crashes, panics, and wars, he notes.

Hartnett also calls out signs of cracking in retail and home-building, pointing out that Home Depot (ticker: HD) stock is down 29% from its peak while builders such as Toll Brothers (TOL) are off 38%. The declines imply cracks in consumer spending, which rarely happens outside recessions, he notes. And the Federal Reserve, far from riding to the rescue with market stimulus, is tightening the noose, planning to raise rates and withdraw liquidity to try to quell inflation.

“We’re bearish,” Hartnett writes, adding that inflation shocks will ripple through to rate hikes and lower growth, resulting in “negative returns” for corporate bonds and stocks in 2022.

https://www.barrons.com/articles/stocks-bear-market-51645814386

Submitted March 30, 2022 at 04:23PM by set-monkey
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