Bank of America: Stock Markets will face losses in the first quarter of 2024
According to Bank of America (BofA), the second-largest bank in the United States, global stock market indices will face losses in the first quarter of 2024 alongside a rally in bonds.
According to Hartnett speaking for BofA, a rally in bonds would indicate a slowdown in economic growth, leading to losses in stock markets in the first quarter of 2024. Despite a roughly 19 percent increase in the S&P 500 this year, the strategist, noting the continuing downward trend, stated that low yields had been one of the main catalysts for stock gains in the current quarter. However, a further decline towards 3 percent would imply a “hard landing” for the economy.
In his investor note, Hartnett wrote that the narrative of “low yield = high stocks” would change to “low yield = low stocks.”
Hartnett also mentioned that sensitivity indicators no longer supported a further increase in risk assets. BofA’s proprietary bull and bear signal rose from 2.7 to 3.8 in the week ending December 6, marking its largest weekly jump since February 2012.
