Bank of America Hartnett on capital flows: rate cut expectations become key variable

智通财经2026/10/09 12:07

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(1) Hartnett from Bank of America pointed out that money market funds saw net inflows of approximately $166 billion last week, marking the largest weekly inflow since April 2020 and indicating that a large amount of capital remains on the sidelines. (2) Hartnett emphasized that without sustained interest rate cuts from the Federal Reserve, this cash is unlikely to move into risk assets easily — in other words, "no rate cuts, no deployment of cash." (3) In terms of equities, Bank of America recommends maintaining a defensive stance before the midterm elections, with the market potentially fluctuating around 10% in both directions. (4) For the technology sector, Bank of America suggests not increasing positions at this time and believes that tech giants will outperform the semiconductor sector. (5) In bonds, Bank of America advises buying 30-year US Treasuries once yields have peaked. (6) Regarding small-cap stocks and REITs, Bank of America sees selective buying opportunities. (7) For gold and commodities, Bank of America recommends continued holding. (8) In emerging markets, Bank of America also recommends holding and sees the Chinese technology sector as worth watching. (9) In terms of market breadth, about half of global stock indices have fallen below key moving averages. (10) Bank of America's Bull & Bear Indicator dropped from 8.8 to 8.1, still in the sell zone. (11) Overall, market sentiment remains cautious, with fund flows closely tied to rate cut expectations. Further attention should be paid to the Federal Reserve's policy path and market concerns triggered by Trump's tariff-related remarks.

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