The S&P 500 may have entered a technical bull market last week, but Bank of America Corp.’s Michael Hartnett says it’s not the start of a new major rally in equities.
The strategist who correctly predicted the selloff in stocks last year said in a note Friday he’s not convinced this is the start of a “brand, new shiny bull market.” The current market looks more like 2000 or 2008, with a “big rally before big collapse,” Hartnett wrote in the bank’s weekly report on investment flows in various asset classes.
He sees upside of as much as 150 points to the S&P 500 versus 300 points of downside between now and Labor Day on Sept. 4. The index is up 15% this year to 4,425.84.
Hartnett’s call in February that the S&P 500 would drop to 3,800 by March 8 failed to materialize after investors turned to technology companies in a defensive shift. He said bears like him have been wrong in the first half because the US economy avoided a recession and a credit crunch, and called the AI-powered tech rally an “unanticipated event.”
Until the Federal Reserve “reintroduces fear” via a higher target for interest rates and unemployment rate exceeds 4% in a recession signal, stocks can stay higher and c