Don't short the market because U.S. stocks have a "roadmap"?
Bank of America’s Hatnett pointed out that although investor sentiment is bearish, actual selling is not significant. He warned that if the United States fails to deliver on tariffs, tax cuts, and interest rate reductions, it could affect investors' confidence in bullish policies for the second half of 2025. According to his "roadmap," Trump needs to address tariffs in the second quarter, handle tax cuts and deregulation in the third quarter, and focus on the Federal Reserve and related agreements in the fourth quarter to maintain the market's bullish momentum
Bank of America’s Hatnett believes that although investors are extremely bearish "emotionally," they are not extremely bearish "practically," meaning that institutions and private clients have not significantly sold off.
However, he warns that this situation will change if U.S. tariffs/taxes/rate cuts fail to materialize, which would undermine investor confidence in the subconscious bullish policy "roadmap" for the second half of 2025.
From Trump's inauguration to Memorial Day (May 26): Trump will preemptively release "bad news" such as DOGE/tariffs;
From Memorial Day to Labor Day (September 1): Policies will shift from bearish trade policies to bullish tax cuts/deregulation/energy policies;
From Labor Day to December 31: Tax cuts, Federal Reserve rate cuts, and declines in oil prices/yields/dollar will bring bullish momentum.
According to this roadmap, Trump needs to finalize tariffs in the second quarter, tax cuts and deregulation in the third quarter, and the Federal Reserve and Mar-a-Lago agreement in the fourth quarter?
