Why BofA Has Turned Bullish on Stocks, Commodities

Michael Harknett discusses the bull and bear indicator, highlighting market drivers like positioning, profits, and policy. He suggests investment strategies focusing on oversold markets in Asia, Europe, and the US. The discussion covers the impact of market positioning and policy shifts on rallies, with a cautious outlook for 2020 due to potential interest rate changes and bond market bubbles. The bull and bear indicator's accuracy is analyzed, noting its limitations during extreme events.

What are the three main drivers of markets according to the transcript?

• Interest rates, GDP, and employment

• Consumer confidence, exports, and imports

• Supply, demand, and inflation

• Positioning, profits, and policy

Which regions and sectors are recommended for investment based on the contrarian buy signal?

• Asia, Europe, and US cyclicals and small caps

• Africa, South America, and US technology

• Australia, Middle East, and US healthcare

• Canada, Russia, and US real estate

What can lead to a market rally even if all investors are bearish?

• An increase in unemployment rates

• A shift in market positioning

• A sudden increase in interest rates

• A decrease in consumer spending

What is necessary for a sustained large market rally?

• High inflation rates

• A policy shift or new economic outlook

• Decreased foreign investment

• Increased government spending

What is the outlook for 2020 according to the transcript?

• A year of significant growth

• A year of economic stability

• A year of cautious market behavior

• A year of declining interest rates

What are sentiment indicators based on?

• Standard deviation optimism and pessimism

• Market volatility and liquidity

• Consumer confidence and spending

• Interest rates and inflation

What can cause sentiment indicators to fail during extreme market events?

• Credit or liquidity solvency events

• Increased foreign investment

• Stable economic growth

• High levels of market optimism