Wall Street's most accurate analyst: European and Chinese stock markets have risen too well, and investors lack confidence in the rise of U.S. stocks
Bank of America Chief Strategist Hartnett believes that the longer it takes for the S&P 500 index to reach a new high, the more difficult it becomes, and investor concerns are increasing accordingly. In contrast, European stock markets are currently performing well, the Chinese stock market is also rising, and even the U.S. bond market is beginning to show signs of improvement
Under the shining performance of European and Chinese stock markets, the US stock market appears dim.
On Wednesday, Michael Hartnett, the chief strategist at Bank of America, known as the "most accurate analyst on Wall Street," stated that the continuous rise of the S&P 500 index is raising increasing doubts among investors, especially against the backdrop of European and Chinese stock markets outperforming the US stock market.
Hartnett pointed out in a media interview:
The longer it takes for the S&P 500 index to reach a new high, the harder it becomes, and investor doubts increase accordingly.
Currently, the European stock market is performing well, the Chinese stock market is also rising, and even the US bond market has begun to show signs of improvement.
It is worth mentioning that Hartnett has been advising investors to increase their holdings in international stocks rather than US stocks this year. He expects that the Mag7 tech stocks that have driven the rise of the US stock market since the beginning of 2023 may experience volatility. Although investors are far from being pessimistic about these tech giants, Hartnett believes that if the upward momentum of these stocks cannot be sustained, they could easily decline.
So far this year, the US stock market has lagged behind other major global markets. Investors are beginning to question the high valuations of US stocks and whether the massive investments in artificial intelligence can continue to yield returns. From 2025 to now, the S&P 500 index has risen by less than 2%, while the Mag7 tech giants' stock portfolio has fallen by 3.3%. In contrast, the MSCI Global Index (excluding the US) has risen by 7%.
Hartnett believes that if the S&P 500 index falls to 5600-5700 points, a decline of about 6% from the current level, investors may expect the Trump administration to take fiscal intervention measures. He likens the stock market to Trump's "traffic light," suggesting that significant changes in the stock market could influence policy direction.
Additionally, according to a previous article by Wall Street Insight, Hartnett believes that the US government is dragging the country into a recession, as the current fiscal situation and job market in the US are deteriorating, with real estate and consumption both stalling. The tailwinds of wealth effect and job growth are weakening, inflation is eroding consumer confidence, and various signs are conveying signals of recession