Bank Of America: If The Nasdaq Closes Below 14,000, All Hell Breaks Loose

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by Tyler Durden
Saturday, Jan 22, 2022 - 02:44 PM

For the past year BofA Chief Investment Strategist, Michael Hartnett, has been one of Wall Street's gloomiest strategists (perhaps just below Albert Edwards and Michael Wilson on the permabear scale) warning that global markets are on the precipice of disaster, and predicting that 2022 will unleash a "rate shock" that will hammer risk assets, and as 2022 gradually rolls out doling out major pain for the bulls, his predictions are coming true. In fact, just last Friday we published his outlook for a "Stagflationary Hellscape For Markets In 2022", and over the past week traders have watched in shock as this view imposes itself on markets.

So since it is Friday, Hartnett's latest Flow Show is out and again like last week, and after skimming through it (the full report is available to pro subs in the usual place), we have some bad news for any bulls hoping that the latest rout has eased some of Hartnett's pessimism. Quite the contrary, because according to the BofA bear, with rates rising and profits dropping, it sets up a "bad combo for credit & stocks" and since the Fed is "hysterically" behind-the-curve (as Hartnett said last week, and again today, Powell "should hike 50bps next week" but won't) and as the rates shock spreads, a leading indicators for profits (in this case the Empire Mfg Survey) is starting to head south & is closely correlated with stocks, hinting at much more pain ahead.