That’s according to a team led by Michael Hartnett, Bank of America’s chief investment strategist, who said their Bull & Bear Indicator is now in “extreme bearish” territory at 1.9 from a previous 2.2.
Hartnett and the team said that buy signal comes amid outflows from emerging market debt — $2.2 billion flowed out in the latest week, the 12th consecutive straight loss they noted. Investor money has also been yanked from high-yield bonds and global equity funds, while fund manager cash levels have risen to 5.3%.
November has traditionally been one of the strongest months for stocks. Evercore ISI’s head of technical strategy, Rich Ross, was also heard encouraging investors to buy equities earlier this week, as he argues the “high” for 2023 is not in yet. The S&P 500 SPX is up 11% so far this year, with the Nasdaq Composite up 25%, despite bouts of selling that began in the summer.