Watch out. Bank of America sees parallels between 2022 and now
The bond market is giving 2022 vibes right now, and not in a positive way, according to Bank of America.
TL;DR
- Bond yields are at multiyear highs, mirroring conditions seen in 2022.
- Elevated oil prices and inflation data suggest the Federal Reserve may continue raising interest rates.
- The 10-year Treasury note yield exceeded 5.2%, and the 30-year yield hit its highest since 2004.
- Equities have shown strength, but a Bank of America strategist warns of a potential 'calm before the storm'.
- Comparisons to 2022, when the S&P 500 fell over 19%, prompt calls for greater caution.
- Investors are suggested to consider put options on the SPY ETF for protection.
- Current indicators like weekly RSIs suggest real yields may be stretched and could retrace.