Bank of America: There are three major thresholds for a “comprehensive risk-off” in US stocks this summer; none have been triggered yet, but signals are accumulating
BlockBeats news, on June 28, Bank of America Securities Chief Strategist Hartnett listed three major thresholds in the latest "Fund Flow Report" that could trigger a "full-scale risk-off" this summer: Mag7 ETF falling below $60, USD/JPY dropping below 110, and the yield curve inverting again. None of these conditions have been met yet, but signals are accumulating. Currently, U.S. equity funds have recorded a net outflow of $850 million, marking the first time since March, following a historic net inflow of $119.2 billion. The continued underperformance of ultra-large cloud companies compared to chip stocks is pushing the sustainability of AI capital expenditure into the spotlight of market debates: Apple has increased MacBook prices and Microsoft has raised Xbox prices, both directly related to rising memory costs. Vera Rubin rack memory prices have surged by 435%, and Goldman Sachs predicts that AI capital expenditure could reach $1.4 trillion in 2027. Hartnett's central question remains—how much further do cloud companies need to fall before the market begins to price in reduced capital expenditure?
Funds in the U.S. stock market have shifted in advance, with liquidity flowing out from tech giants and flooding into cyclical assets such as semiconductors, small and mid-cap stocks, housing, and REITs. The market sees this as an early move in anticipation of a policy focus shift toward "affordability." At the broader asset level, Hartnett believes gold under $4,000 still holds strong allocation value, and going long on long-term U.S. Treasuries is currently the most contrarian long-term trade. The dollar is suitable only for short-term holdings rather than long-term allocation, and his strategic proposition is to go long on emerging markets in the long run. Since Federal Reserve Chair Walsh took office on May 22, U.S. Treasuries have risen by 3.2%, stocks have fallen by 1.6%, and bonds have clearly outperformed.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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