BofA's Hartnett Recommends Maintaining Positions in Commodities and Gold Amid Policy Interventions
Bank of America strategist Michael Hartnett advised investors to maintain long positions in commodities and gold as central banks implement policy measures aimed at curbing rising bond yields. He cited the appreciation of the Japanese yen as evidence that these interventions are working, with efforts focused on defending key market thresholds such as gasoline prices and Treasury yield levels. Hartnett noted that 10-year rolling returns for U.S. equities and commodities currently stand at 15% and 11%, respectively—far outperforming the negative 2% return of Treasuries, which he described as experiencing its weakest decade in a century. He also analyzed potential outcomes from the upcoming U.S. midterm elections, suggesting that while a Democratic sweep is unlikely due to Senate geography, it could still trigger market volatility. In terms of fund flows for the week ending September 2, cash and bond funds led inflows with $30 billion and $18.3 billion respectively, followed by gold at $3.2 billion. U.S. equities saw outflows of $5.9 billion, marking their second consecutive week of withdrawals.
Tickers: $BAC
Topics: central banks commodities gold Treasury yields U.S. midterm elections