Bank of America's top strategist Michael Hartnett has, once again, reflected on weekly flows, which saw the growth outperform value.
The week to Wednesday yielded 6th consecutive inflows to tech ($1.7 billion). On the other hand, fund managers continue to increase exposure to defensive assets with healthcare attracting $1.7 billion - the largest inflow in five months.
Elsewhere, Hartnett also notes the largest inflow to bank loans since Feb17 ($2.2 billion) and the largest inflow to EM equities in 10 weeks ($5.3 billion).
Overall, $9.2 billion went into stocks in the week to Wednesday, with $7.5 billion and $1.4 billion outflows from cash and bonds, respectively.
Hartnett reiterated his bearish view on the S&P 500 for 2022 with the risk of three shocks.
"Inflation shock" worsening, "rates shock" just beginning, "recession shock" coming, the strategist said in a client note.
Inflation always precedes recessions; late-60s recession preceded by consumer price inflation, 1973/4 by oil/food shocks, recession of 1980 by oil, 1990/91 by CPI, 2001 by tech bubble, 2008 by housing bubble; last dominos to drop in terms of recession expectations is higher yields & weaker dollar, and steeper yield curve and banks/consumer keep falling, Hartnett wrote in a note to clients.
By Senad Karaahmetovic