Bank of America identifies the next bubble and says investors should sell stocks rather than buy them after the last rate hike Another bubble has emerged, courtesy of the bank-sector crisis which has already felled three U.S. regional banks.
Bank of America analysts led by the Michael Hartnett say money-market funds are the new hot asset.
They point out that assets under management for money funds has now exceeded $5.1 trillion, up over $300 billion over the past four weeks. They also counted the biggest weekly flows to cash since March 2020, the biggest six-week inflow to Treasurys ever, and the largest weekly outflow from investment-grade bonds since Oct. 2022.
The last two times money-market fund assets surged — in 2008 and in 2020 — the Federal Reserve slashed interest rates. Hartnett is fond of the saying, “markets stop panicking when central banks start panicking,” and he noted a surge in emergency Fed discount window borrowing has historically occurred around a big stock-market low.............
https://www.marketwatch.com/story/bank-of-america-identifies-the-next-bubble-and-says-investors-should-sell-stocks-rather-than-buy-them-after-the-last-rate-hike-98b803ab?mod=home-page
