By Alexander Bueso
Date: Thursday 22 Nov 2018
LONDON (ShareCast) - (Sharecast News) - Strategists at Bank of America-Merrill Lynch continue to be "sellers" in shares, arguing that US central bank policy tightening cycles "always" end with a "financial event", although markets may perhaps attempt a bounce over the coming week.
In a research report sent to clients, the strategists said that there was a "price keeping operation" under way in the US stockmarket "via manipulation of & pressure on oil/US dollar/Fed to ease financial conditions."
Describing the current unwinding in the technology space and credit markets as "vicious", BofA-ML pointed out how being 'long' volatility was now the "consensus" call.
Together with speeches from the Federal Reserve's chairman and vice-president ahead over the coming week, alongside the G-20 summit in Buenos Aires, the investment bank said markets might try and "bounce" with the S&P 500 attempting to claw its way back towards 2,750.
Nonetheless, a peak in volatility and a trough in returns would require a "capitulation" by the US monetary authority, driven by a "financial event" and recession fears.
Triggers for a possible "big" policy panic were still forming, they said, including a drop in the S&P 500 Spider ETF below $250, a fall in the ISM survey's subindex of new orders below 50 points, a "credit event" at General Electric and contagion or capitulation by either China's central bank or the US President.
Such events might lead to a capitulation by the Fed over the next one to three months, they said.
"We see no positioning or policy capitulation yet; institutional positioning not bearish enough to signal Big Low."
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Currency | US Dollars |
Share Price | $ 159.29 |
Change Today | $ 3.41 |
% Change | 2.19 % |
52 Week High | $180.12 |
52 Week Low | $103.78 |
Volume | 1,374,007 |
Shares Issued | 1,088.42m |
Market Cap | $173,374m |
RiskGrade | 177 |
Strong Buy | 7 |
Buy | 7 |
Neutral | 3 |
Sell | 0 |
Strong Sell | 0 |
Total | 17 |
Time | Volume / Share Price |
10:15 | 200 @ $159.29 |
10:15 | 750 @ $159.29 |
10:15 | 100 @ $159.28 |
10:15 | 100 @ $159.25 |
10:15 | 100 @ $159.25 |
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