It is not only BofA's "smart money" clients who have been selling the rally non-stop (and at an accelerating pace) for the past 10 weeks: so has the bank's chief investment strategist, Michael Hartnett, whose reluctance to embrace the mania has been duly documented on these pages.Below we lay out the reasons why he "remains a seller of risk."
From his latest summary note:
Three weeks ago, when the Fed and Janet Yellen shocked markets with their extremely dovish statement in which they admitted the US Federal Reserve no longer is US data dependent, and instead is far more focused on global developments and especially China's dollar-pegged currency (which makes it impossible for the Fed to be hawkish without causing further FX instability and leading to more Chinese capital flight), CNBC's Steve Liesman asked Yellen point blank a question which would seem otherwise completely taboo: does the Fed have a credibility problem.
This was her response:
With everyone's focus sharply attuned on anything to do with the Fed's rate hike policy, many will probably wonder why yesterday the Fed announced that this coming Monday, April 11, the Fed will hold a closed meeting "under expedited procedures" during which the Board of Governors will review and determine advance and discount rates charged by the Fed banks.
As a reminder, the last time the Fed held such a meeting was on November 21, less than a month before it launched its first rate hike in years.
In the final day of the week, it has again been a story of currencies and commodities setting stock prices, however instead of yesterday's Yen surge which slammed the USDJPY as low as 107.67 and led to a global tumble in equities, and crude slide, today has been a mirror imoage after a modest FX short squeeze, which sent the Yen pair as high as 109.1, before easing back to the 108.80 range.