Two weeks after BofA CIO Michael Hartnett admitted that - with S&P futures trading just below 4,500 - he had been wrong to push a bearish narrative, but - listing numerous reasons why the rally could topple at any minute - he was not willing to capitulate on his long-running bearish call, stocks appear to have found a ceiling, with the emini failing to break above the 4,500 level and instead, dipping lower just the divergence between Fed reserves and risk assets has grown to ominous levels.
But it's not just the growing risk of a sudden liquidity stumble that threatens the market's euphoric mood where, according to Goldman, virtually no bears are left: in his latest Flow Show note titled "The Billionaire's Barbell", Hartnett also warns that investors who piled into tech stocks this year risk being caught off-guard by the recent selloff sparked by interest rate hikes which pushed the 2Y note above 5%.
