BofA Says US Stocks Can Avoid Big Drop If Yields Stay Below 5%
- Says S&P 500 can continue to trade above key level of 4,200
- Sees recession, rate cuts sparking bullish cycle in 2024
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US stocks can avoid a dire outlook as long as bond yields stay below a historic high of 5%, according to Bank of America Corp. strategist Michael Hartnett.
The strategist — among the more bearish voices on Wall Street — said the S&P 500 index can continue to trade above 4,200 points in the near term in such a scenario. A drop below that level would be driven by a stronger dollar, higher yields, oil rising above $100 a barrel and “clear signs” that a credit crunch for small businesses was causing higher unemployment, Hartnett wrote in a note dated Oct. 12.