BofA Warns of Forced Stocks Selling If Credit Problems Persist

2 days ago

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Bank of America warns of potential forced stock selling by long-only investors, including pension funds, if credit market strains persist.
Savita Subramanian notes that continued issues in private lending could compel pension funds to sell index funds to avoid negative marks on private assets and meet obligations.
Passive investment heavily influences the S&P 500, meaning a downturn could trigger index-tracking funds to sell equities, exacerbating market declines.

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