Just when we thought the strategist who we ruled recently is officially "Wall Street's biggest bear" having outbear-ed even Morgan Stanley's Michael Wilson and, at times, permabear Albert Edwards, here comes Bank of America's Michael Hartnett with his Friday dose of fire and brimstone, and in his latest Flow Show note titled Atlas Slugged, proves us wrong as he descends below even Zero Hedge levels of absurd bearishness, and writes that the inflation shock" is worsening, the "rates shock" is just beginning, and "recession shock" coming, and is why Hartnett's dismal view remains unchanged, if not even bleaker compared to last week: "ISM <50, EPS growth <0% by year-end; cash, volatility, commodities, crypto to outperform bonds, stocks...SPX <4000 in '22, GT30 >4% in '23; stagflation = long defensives & inflation assets, short cyclicals & deflation assets."
Wasting exactly zero time, Hartnett proceeds to answer the rhetorical question posed by Morgan Stanley's quants earlier, namely why "Institutional Selling Has Been Relentless into every uptick", by highlighting the following client feedback in his snapshot of the current zeitgeist:
- "Bill Dudley in everyone's mind right now",
- "no-one wants to get cocky ahead of 50bps & QT",
- "can't make my mind up if it's recession or stagflation",
- "recession now soooo consensus",
- "oil says war shock over".