BofA: Central Banks Are Buying $1.3 Billion in Assets Every Hour, Creating A ‘Frankenbull’ Market

The comments below are an edited and abridged synopsis of an article by Tyler Durden

Bank of America CIO Michael Hartnett issued a code red for stocks, but what is happening is getting crazier with each passing day and each all-time high. Hartnett has tripled down on his calls for a near-term correction, and he warns that the current “froth, greed, vaccine, inflation, renminbi the new Deutschmark” are all a “toxic brew for uber-Goldilocks 2021 consensus.” This is why he calls the current stock market the Frankenbull.

Central Banks Buying $1.3 Billion in Assets Every Hour | BullionBuzz | Nick's Top Six
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How did we get here? A list:

$1.3 billion: asset purchases by central banks every 60 minutes since March

190: central bank rate cuts in 2020, four rate cuts every five trading days

37: US Treasury MOVE index of volatility at all-time low this quarter

9.2%: lowest global CCC HY bond yield since September 14

$2.5 trillion: issuance of US IG, HY bonds, leveraged loans in 2020, all-time record

$3.4 trillion: issuance of US Treasuries in 2020, all-time record

$39 trillion: rise in global equity market cap from lows (to >$100 trillion)

25.3x: MSCI ACWI equity 12-month forward PE, highest since March 2000

$139 billion: record inflows into global equity funds past six weeks (prior peak January 2018)

9,730: global equity offerings (IPOs etc) in 2020…$1.1 trillion annualized, best year ever

2009: first time since Q4 2009, US IPO/secondary issuance higher than S&P 500 buybacks

As we enter 2021, it is similar to the transition from the 1960s to the 1970s (stagflation, monetary and fiscal instability, breakdown in global cooperation, civil disobedience) and which coincided with three trends: rising bond yields, a falling US dollar, and volatile, sideways stock markets.

Favourite trades for 2021 remain a weaker US dollar, higher gold, and higher volatility.

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