BAML's chief investment strategist, Michael Hartnett, thinks so.
BANK OF AMERICA: Investors are suffering from 'Stockholm syndrome' — and the endgame looks ugly
By OSCAR WILLIAMS-GRUT at Business Insider
Excerpt:
Globally shares are up 5% this year as investors embrace risk, while the safer bond market is down 3%. That's because investors assume central banks that are now pumping money into economies around the world have their best interests at heart — hence the "Stockholm syndrome."
But BAML's chief investment strategist, Michael Hartnett, says investors shouldn't be so quick to put their faith in central bankers and urges investors to take more caution. Hartnett and his team think the situation is actually "lose-lose" for investors going big on shares.
The first scenario sees central banks, most importantly the US Federal Reserve, stop pumping cash into global economies in the form of quantitative easing.
This would create more volatility in shares, because part of what has been supporting stock markets around the world is central banks' buying up huge amounts of debt and the assumption that this will continue.
Source: Bank of America Merrill Lynch
Companies exposed to US discretionary consumer spending been rallying strongly but could be due a correction.
