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Bank of America strategist: “I’m so bearish, I’m bullish”



Only on the Wall Street investment research report, entitled “I’m so bearish, I’m bullish,” does it make any intuitive sense.

That’s why Michael Hartnett, chief investment strategist at Bank of America, went for his weekly asset flow report.

According to them, the “nihilistic” bulls are the background of a decade of maximum liquidity, and the minimum growth is still maximum bullish. After all, the value of American financial assets is 6.2 times gross domestic product. So while GDP has spilled over with about 30 million unemployed, it has been counted on purchases of assets from the central bank that make up to $ 2 billion an hour.

The lower yield on moving bonds of the structural outlook is now “shared by all”

;, as the yield on 10-year hedged securities protected from inflation was -1.08% on Thursday. While that “doesn’t mean I’m saying it’s wrong,” it sparks a bubble, Hartnett said. After all, the S&P 500 SPX,
+ 0.64%
at 4000, gold GC00,
-0.19%
at $ 3,000 an ounce and CL.1 oil,
-1.43%
at $ 60 per barrel “probably does not correspond to 0% TMUBMUSD10Y,
0.532%
The profitability of the treasury. “

Banks, he said, are unable to lend, as seen by a 71% survey of senior Federal Reserve officials that lending standards have been tightened, the highest since the fourth quarter of 2008. States and local authorities unable to spend, with state tax revenues down 37% from last year in New York, 42% in California and 53% in Oregon.

Meanwhile, the federal deficit is growing, with the deficit as high as 25% of GDP for the first time since World War II if there is a package of Phase IV incentives of at least $ 1 trillion. These deficits will be financed by actions of the Federal Reserve, which will lead to a depreciation of the dollar.

Hartnett says the history of major bear market markets predicts an S&P 500 top between 3,300 and 3,600, between August and January, with “the liquidation of Wall Street skipping while the weaker dollar / wider credit spreads signaling credit event or fiscal incentive / higher gains for signal recovery. “

He is bearish for 2021 and says the topics for next year will be buying instability and inflationary assets.

The buzzing

The market is waiting for the employment report of the Ministry of Labor, which should come out at 8:30 East. Forecasts are broad, but economists in a MarketWatch poll estimate 1.7 million jobs were added in July. The unemployment forecast will fall for the third consecutive month – to 10.5% in July from 11.1% in June.

As with the data on unemployment claims, economists warn that seasonal adjustment can level the picture of jobs at a time when the economy is not working according to its typical seasonal patterns.

Finance Minister Stephen Mnuchin said the two countries remain “very far apart” on some important issues in a stimulus package deal that will include expanding federal unemployment benefits. The White House is preparing executive orders that could potentially prevent bans and increase unemployment benefits.

President Donald Trump on Thursday night stepped up his actions against Chinese technology companies by signing an order that would prevent US companies from doing business with the owner of WeChat Tencent Holdings 700,
-5.04%
as well as the social media app TikTok. It is not clear whether the order, which will take place in 45 days, affects Tencent’s vast holdings in the gaming space, although only WeChat is mentioned in the order.

Trump also signed an order to restore Canada’s aluminum tariffs.

For UBER,
+ 4.54%
reported a loss of $ 1.8 billion in the second quarter, with its food supply business generating more revenue than the first time.

T-Mobile US TMUS,
+ 0.18%
may grow as it becomes the number two mobile phone operator of subscribers, surpassing Verizon Communications VZ,
+ 0.50%,,

Groupon GRPN,
-0.54%
may rise after the lost online coupon company beat Wall Street estimates by a large margin in the second quarter.

Zilllow Z,
+ 1.16%
C G,
+ 1.31%
is growing in the pre-sale trade as the real estate company reported second-quarter revenue well above Wall Street expectations and said trends from home work have made more people think about relocating.

ICE Intercontinental Exchange,
+ 1.35%,,
the owner of the New York Stock Exchange said he would buy mortgage-software company Eli May for $ 11 billion in cash and shares of private equity Thoma Bravo.

The market

The Dow DJIA,
+ 0.68%
finished higher on Thursday for its fifth straight profit, but US stock ES00,
-0.36%
YM00,
-0.38%
NQ00,
-0.37%
were weaker amid renewed tensions between the United States and China and before job data.

Hang Seng HSI,
-1.60%
fell 1.6 percent after Trump’s move against Tencent and TikTok.

EURUSD,
-0.54%
fell sharply against the dollar.

The diagram

The latest report from the New York Fed on household debt shows arrears in credit card growth but declining student debt and mortgages. The Coronavirus Aid, Relief and Economic Security Act provided relief for owners of student and mortgage loans, but not for credit card debt and car loans.

Random readings

Facebook removed hundreds of accounts Thursday from a foreign troll farm posing as African-American in support of Trump and QAnon’s conspiracy theories.

Meet the really, really, really long Tanistrofey.

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