BofA’s Hartnett flags record tech outflows, favors gold over USD exposure

Bank of America strategist Michael Hartnett warned that technology funds saw a record $9.3 billion of outflows in the week to June 24, reversing the prior week’s record inflow as investors rotated away from mega-cap AI leaders into smaller, more rate-sensitive areas such as semiconductors, housing, REITs, and other cyclicals. Despite the tech rotation, Hartnett said the broader equity backdrop remains supported by strong S&P 500 margins, but he highlighted several risk-off triggers, including weakness in the Magnificent Seven ETF, a drop in AUD/JPY, and a yield-curve inversion. He remained cautious on the U.S. dollar and reiterated a preference for gold, calling pullbacks below $4,000 attractive entry points, while also favoring emerging markets over U.S. stocks. The flow data also showed continued demand for bonds and heavy outflows from cash, suggesting ongoing positioning shifts rather than outright broad risk aversion.