Bank of America (BofA) analysts are warning of a collapsing U.S. labor market and a potential rise in unemployment next year.
They also recommended selling a stock market rally ahead of the likely surge in job losses.
“Bears (like us) worry unemployment in 2023 will be as shocking to Main Street consumer sentiment as inflation in 2022,” stated BofA strategists led by Michael Hartnett, who revealed that global equity funds were having their biggest weekly outflows in three months.
“We’re selling risk rallies from here,” he said, reiterating his preference for bonds over equities in the first half of 2023.
The BofA’s Bull & Bear Indicator rose to 2.0 from 1.4 in the week through Nov. 30, indicating that the “buy signal” for risk assets is almost over, according to the analysts….