According to Michael Hartnett, a strategist at Bank of America (BofA), the bank’s clients are "fleeing equities as the risk of an economic contraction remains high."
During the last two weeks, private clients were net sellers of stocks. What is more, in the given period, bond purchases were the strongest since October.
Hartnett supposes that "private clients are shifting back to ‘risk-off’ mode" amid the threat of a hard landing for the US economy. The situation was also aggravated by the fact that Fitch downgraded the US credit rating.
Earlier, Michael Hartnett disclosed his bearish forecasts for stocks. However, this year, his pessimistic predictions have not played out, as US equities were rallying for five straight months until the end of July.