Markets primed for early 2020 'melt-up': BAML

(Reuters) Bank of American Merrill Lynch analysts on Friday predicted bullish investors would continue to drive equity markets higher early next year. 

The “market (is) primed for Q1’20 melt-up as Brexit & trade war risks receed.,” BofA’s Michael Hartnett said in a note to clients, adding the firms Bull & Bear sentiment swing-o-meter was now at its highest in 18 months. 

U.S. Federal Reserve and the European Central Bank support, Britain’s conservative party clinching a majority in Thursday’s election and reports of a U.S.-China trade deal helped “resolve (the) main two global macro tail risks, and remove lingering U.S. dollar... risk premiums,” Hartnett added. 

Analysing EPFR weekly fund flow data, BofA said bond funds had attracted $9.1 billion in week to Wednesday, while equity funds saw $1.7 billion of outflows.


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