Investor Alert

Market Extra Archives | Email alerts

Sept. 30, 2022, 10:23 a.m. EDT

Short U.S. stocks and short-term Treasurys until Halloween, Bank of America strategist says

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    U.S. 2 Year Treasury Note (TMUBMUSD02Y)
  • X
    E-Mini S&P 500 Future Continuous Contract (ES00)
  • X
    S&P 500 Index (SPX)

or Cancel Already have a watchlist? Log In

By Steve Goldstein

Short U.S. stocks as well as short-term bonds until Halloween, a Bank of America strategist advises.

Michael Hartnett, chief investment strategist at Bank of America Securities, said he’s a tactical bear in recommending “short twos and spoos,” the former meaning the 2-year Treasury /zigman2/quotes/211347045/realtime BX:TMUBMUSD02Y 0.00% , the latter a reference to the S&P 500 futures contract /zigman2/quotes/209948968/delayed ES00 +0.04% .

He’s expecting a policy panic in November — specifically the G-20 meeting in Bali, scheduled for Nov. 15 and 16.

Recent interventions by the Bank of Japan, to buy the yen, and the Bank of England, to buy gilts, he said were neither credible nor coordinated, so impotent. A Fed and U.S. Treasury panic would require a U.S. credit event, he added.

Related : This is the time when accidents like Enron and Lehman have happened, JPMorgan quant says

“Markets stop panicking when central banks start panicking,” Hartnett said. Both the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.03% and U.S. government bonds /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% have tumbled this year.

“Wall Street disorder in 2022 reflects painful regime change as bullish deflationary era of peace, globalization, fiscal discipline, QE, zero rates, low taxes, inequality gives way to inflationary era of war, nationalism, fiscal panic, QT, high rates, high taxes, inclusion,” he said.

Wars, he notes, are inflationary, pointing to the $1.4 trillion of fiscal stimulus from the U.K. and European Union to ease the energy shock and build the military.

He said U.K. equity outflows are on pace for the worst year ever. There also was the biggest outflow from investment grade, high yield and emerging market debts in 13 weeks, and the largest outflow from Treasury-inflation protected securities since May.

add Add to watchlist BX:TMUBMUSD02Y
BX : Tullett Prebon
0.00 0.00%
Volume: 0.00
Nov. 25, 2022 2:01p
US : U.S.: CME
$ 4,034.25
+1.75 +0.04%
Volume: 564,882
Nov. 25, 2022 12:14p
-1.14 -0.03%
Volume: 0.00
Nov. 25, 2022 2:32p
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
0.00 0.00%
Volume: 0.00
Nov. 25, 2022 1:58p

This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.