by Sagarika Jaisinghani
The stunning US stock rebound is likely over, even as the US takes steps toward trade negotiations, according to Bank of America Corp.’s Michael Hartnett.
The strategist said stocks had “correctly” rallied on optimism around lower tariffs in the second quarter. However, he doesn’t see further gains as investors “buy the expectation, sell the fact,” Hartnett wrote in a note.
The S&P 500 has surged 14% since President Donald Trump announced a reprieve in some levies on April 9, although it remains 3.7% lower for the year, trailing international peers.
Washington has also taken a softer tone on global trade in the past few weeks, and is weighing a dramatic tariff reduction during weekend talks with China. On Thursday, Trump unveiled a trade framework with the UK, calling it a “breakthrough” deal.
Hartnett has recommended bonds over stocks for 2025. Within equities, he prefers international to US assets. He said in the note dated May 8 that American stocks are in a late-stage structural bear market relative to non-US peers.
Fund flows have backed up Hartnett’s views. About $24.8 billion was redeemed from US stocks in the past four weeks, the biggest in two years, according to the note from BofA citing EPFR Global data.
Copyright Bloomberg News
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