US stocks can avoid a dire outlook as long as bond yields stay below a historic high of 5%, according to Bank of America Corp. strategist Michael Hartnett.
The strategist — among the more bearish voices on Wall Street — said the S&P 500 index can continue to trade above 4,200 points in the near term in such a scenario. A drop below that level would be driven by a stronger dollar, higher yields, oil rising above $100 a barrel and “clear signs” that a credit crunch for small businesses was causing higher unemployment, Hartnett wrote in a note dated Oct. 12.
The 4,200 mark is also close to the benchmark index’s 200-day moving average, considered a key technical support level that traders use to assess whether the longer-term trend is up or down. The S&P 500 dropped close to it in early October as US bond yields surged to their highest in 16 years. The index has since rallied 2.8% as yields retreated, and is now tracking its second weekly advance in a row.
For 2024, Hartnett said the “best bullish shout” was that a recession and rate cuts by the Federal Reserve would drive gains in bonds and gold, as well as a broader stock market rally. The strategist has remained bearish for 2023 overall even as the S&P 500 has surged 13%.
With money market funds still seeing annualized inflows this year at $1.4 trillion, investors need to see an economic contraction as well as rate cuts to “sell cash” and “ignite new bulls,” the strategist said.
Other highlights include:
The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.
Wealth managers offer unique ideas for couples to grow closer emotionally and financially.
Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.
Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.
With a majority find getting new clients a challenge, report suggests fee transparency as a way to foster trust among the unadvised.
Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies
From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.
