By Senad Karaahmetovic

In a client note titled “3600 is the new bull case” (heard on the Street), Bank of America strategist Michael Hartnett has reflected on flows in a week to Wednesday.

According to the bank, the stock market lost 1 US dollar in six months. BofA’s Bull & Bear Indicator is now at 1.5, which is a clear contrarian “buy” signal. BofA’s Global Breadth Rule also falls within the “buy” zone.

“Markets are great storytellers…the story of 2022 is “inflation shock = rates shock = recession shock;” the larger story of the 2020s is regime change, higher inflation, higher rates, higher volatility, & lower asset valuations, driven by trends in society (inequality), politics (populism/progressivism), geopolitics (war), environment (net-zero), economy (de-globalization), demographics (China population decline), all inflationary, all favor cash, commodities, real assets, volatility, small cap, all damage bonds, credit, private equity, tech stocks,” Hartnett said in a client note.

Investors pulled in $1.4 billion of gold, $5.2 Billion from equities and $7.6 Billion from cash. Bond holders took $12.3 billion.

The market witnessed the largest outflows of energy and other materials between 2016 and 2014.