Analysts at Bank of America have warned that a rebound in inflation and an impending recession will turn U.S. stocks upside down.
(AFP file photo)
[Financial Channel/Comprehensive Report] With the decline in inflation and the slowdown in interest rate hikes, U.S. stocks have rebounded. However, Bank of America analyst Michael Hartnett, who has the title of Wall Street's most accurate analyst, warned that the rebound in inflation and the upcoming The economic recession will cause the US stock market to undergo earth-shaking changes.
Hartnett is known as the most accurate analyst on Wall Street in 2022. He has accurately predicted the sharp drop in U.S. stocks in the first half of the year, and also predicted a strong rebound in U.S. stocks in July.
Please read on...
Foreign media reported that Bank of America admitted in a report that in the past three months, the annualized inflation rate has dropped to around 0%, but this year the inflation rate will push up again.
Bank of America said that in addition to the continued tightness in the labor market, another factor driving up inflation is another surge in commodity prices, as the reopening of the Chinese economy will trigger a wave of oil demand, coupled with the ongoing conflict between Russia and Ukraine The resulting supply problems will put new pressure on oil prices.
Also, a recession is coming, which could be a big deal.
That's because rising unemployment will be accompanied by a dismal 2% personal savings rate, a 15% surge in credit card debt, and a record average credit card interest rate of 19%.
Since the supertrend of inflationary assets against deflationary assets is still in its infancy, in other words, investors should hold new leading assets such as commodities and non-US stocks.
Hartnett warned that the big tech trades that have dominated the market since the Great Recession will underperform in the coming years, and that investors should hold small caps over large caps and value stocks over growth.
Grasp the pulse of the economy with one hand I subscribe to Free Finance Youtube channel
Already added friends, thank you
Welcome to 【Free Finance】
Already liked it, thank you.