News

We provide the latest news
from the world of economics and finance

Back
27 February
Beware of banks breaking bad, warns top B. of A. strategist. He casts a wary eye on bank-loan ETFs.

Problem loans in the financial-services sector imply mounting risks for markets

Bank of America strategist Michael Hartnett is worried about problems “under the hood” of the U.S. economy
Bank of America strategist Michael Hartnett is worried about problems “under the hood” of the U.S. economy Photo: Getty Images

An alarm bell has been rung by one of Wall Street’s most prominent strategists. Investors ought to be wary of developments in the financial sector, with problem loans increasingly a concern that could trigger a “proper flush in risk assets” next month.

This stark warning emanates from one of Wall Street’s most respected commentators, Bank of America chief equity strategist Michael Hartnett. His weekly flow note alerts investors to watch closely the performance of exchange-traded funds that specialize in bank loans. The panic generated by Jamie Dimon’s “cockroaches” forewarning last October has never fully dissipated.