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LONDON – Markets are likely to experience a short-term rebound before resuming the sell-off which has sent Wall Street’s Nasdaq tech index down over 25% since the beginning for of the year, BofA analysts wrote in a weekly strategy note.

“Fear and loathing suggest stocks prone to imminent bear market rally but we do not think ultimate lows have been reached”, the team led by Chief Investment Strategist Michael Hartnett argued.

The current market turmoil which has seen tech stocks and crypto currencies tumble now rivals the dotcom crash of the turn of the last century as well as the subprime financial crisis of 2008, the BofA note also said.

Tech stocks have experienced their largest outflows year-to-date in the week to Wednesday with $1.1 billion dollars pulled out of equity funds, BofA noted, citing EPFR data.

Nervous investors withdrew capital from bonds for the sixth week in a row with $11.4 billion leaving, while $11.6 billion were pulled away from investment grades bonds.

By contrast, U.S. government bonds seen as safe havens, enjoyed a their largest inflows since March 2020 with $11.5 billion.

The report also pointed out that emerging markets equity funds saw a first week of outflow in seven weeks while in Europe it was a 13th straight week of negative capital flows.

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