Investors Are Tactically Bullish But Positionally Bearish As All Eyes Are On Credit, Consumer And China: BAML

Investor flows are starting to shift further into defensive positioning, but we’re also seeing some seemingly conflicting moves within the markets. One firm suggests China is the only one that can bring the global earnings recession to an end.

Tactically bullish?

Generally, the latest “Flow Show” report from Bank of America Merrill Lynch is rather contradictory in certain areas. Chief Investment Strategist Michael Hartnett and team said in their report dated Jan. 24 that they remain “tactically bullish” although positioning is “still bearish.” They expect risk assets to rally in the first quarter, carrying the S&P 500 as high as 2,750 until the Fed’s policy capitulation is “complete.” In other worse, they advise investors to sell after rather than before the...