The Most Accurate Analyst Speaks Out Again This Weekend

Source: Global Market Report

Michael Harnett, the Chief Investment Officer of Bank of America—reputed as Wall Street’s most accurate analyst—released his market briefing this week. The most notable part of this report isn’t a single conclusion, but rather a few “contrasts.”

1) First contrast: Indexes are strong, but capital is exiting

According to BofA data, over the past week: $55 billion flowed into cash, $29.1 billion into bonds, $13.9 billion flowed out of stocks; U.S. equities saw $17.2 billion in outflows, the largest since March. Crypto experienced $2 billion in outflows, gold saw $3 billion in outflows for the seventh consecutive week. Therefore, this is not an indiscriminate bull market, but a market characterized by “rising prices with concurrent risk reduction.”

2) Second contrast: Outflows from stocks overall, but continued inflows into tech

U.S. stocks saw $17.2 billion in outflows overall, but there was a $14.3 billion inflow into tech stocks, possibly hitting a record for tech inflows since the start of this year. This shows the market isn’t refraining from buying stocks; instead, investors are only buying the narrow group of stocks they have confidence in.

3) Third contrast: Weak non-farm payrolls, but profits may be strong

Although the June non-farm payrolls data was weak, corporate profits for 2026 may be very strong. If weakening employment arises purely from an economic downturn, then the stock market is at risk; but if weaker employment partly stems from productivity gains and improved corporate efficiency, then the market may not be in danger and profit margins could even continue to improve.

4) Fourth contrast: Gold surges, but capital continues to exit

Gold has been rising continuously, surpassing $4,100, but BofA data shows gold funds have been in outflow for seven straight weeks. The lack of capital confirmation behind gold’s rally makes it susceptible to short-term fluctuations.

Additionally, the Bank of America Bull & Bear Indicator has risen to 9.5, close to historical highs and worthy of attention. However, this does not mean a “crash is imminent”—historically, after the indicator triggers a sell signal, global equity markets have on average declined 2%-3% over the subsequent 2-3 months, with a hit rate of around 60%, and the maximum drawdown can reach 15%-20%.