Bank of America Bearish on Equities in the Following Year

Strategist at Bank of America (BofA) noted to their clients they see bearish equity market in the following year and recommended clients to hold on to cash as inflation and interest rates upend the trajectory of global asset prices.

Micheal Hartnett, strategist at BofA recommended client to long oil, energy, the U.S. dollar and real assets. He noted in the report as reported by Bloomberg, “Investors can expect a “rates shock” in 2022, following the “inflation shock” of 2021 and “growth shock” of 2020, they wrote”.

“We are therefore bearish and believe capital preservation will grow as a theme in the year ahead,” the bank strategists said.

However, other Wall Street banks including Goldman Sachs Group and JP Morgan Chase & Co. earlier noted they see the market climbing at a more muted pace.

BofA’s bullish case for equities is if the FED keeps real rates deeply negative.