Bank of America strategist predicts end of stocks’ bull run with possible bubble or recession ahead

Welcome to Extreme Investor Network, your go-to source for all things finance. Today, we are diving into the current state of the stock market and the warning issued by Bank of America’s Michael Hartnett.

According to Hartnett, stocks are currently in a “late secular bull market,” which he believes will ultimately end in either a bubble or a recession. This warning comes as equities have shown signs of sputtering, with concerns over stubborn inflation and slow growth weighing on investors’ minds.

Hartnett has been cautioning investors for months that stocks are approaching bubble territory. Since October 2022, the S&P 500 has surged by over 40%, driven by the AI investing trend and a stronger-than-expected economy. However, this rally has hit a roadblock in recent months, with the Federal Reserve hinting at delaying interest rate cuts until the second half of 2024, further adding pressure on valuations.

Related:  General Motors falls short of Wall Street expectations as supply chain challenges dent profit

The possibility of stagflation, a scenario characterized by high inflation and sluggish growth, is also on the radar. Recent economic data, such as April’s jobs report, has raised concerns about the economy’s direction. Hartnett highlighted the GDP and consumer price index figures as “stagflationary,” noting that a lower-than-expected increase in non-farm payrolls could trigger a risk-off sentiment in the market.

JPMorgan has echoed these worries, pointing to stagflation as a potential threat to the economy. However, BofA’s head of US equity and quantitative strategy, Savita Subramanian, remains optimistic about the stock market’s prospects, stating that the bull market still has room to run.

As investors navigate through uncertain market conditions, it’s crucial to stay informed and make well-informed decisions. At Extreme Investor Network, we strive to provide you with unique insights and analysis to help you navigate the financial landscape with confidence. Stay tuned for more updates and expert commentary on the latest financial trends.

Related:  How Intel Plans to Increase Foundry Profits Following $7 Billion Loss

Source link