- Investors should sell the rally in stocks ahead of upcoming Fed interest rate hikes, Bank of America said in a Friday note.
- BofA’s Michael Hartnett expects the Fed to raise interest rates by 0.50% in March 2022, ahead of consensus.
- The bank also highlighted the striking similarity between the unwind in tech during the 2000 dot-com bubble and today.
The stock market’s recovery rally over the past week represents an opportunity for investors to sell ahead of an upcoming Fed interest rate “shock,” Bank of America’s Michael Hartnett said in a Friday note.
Hartnett recommends investors “sell the rip” rather than “buy the dip” in stocks as interest rate hikes are about to rock Wall Street, and amid a strikingly similar unwind in tech stocks compared to the dot-com bubble in 2000.
According to Hartnett, the Fed could, and should, begin to hike interest rates at its December meeting next week. If they don’t, the market will price in a 0.50% interest rate hike in March 2022 because of a “red hot labor market,” Hartnett said, pointing to Thursday’s jobless claims data hitting its lowest level since 1969.