BofA Strategist Hartnett Recommends Selling U.S. Stocks and Dollars on Rallies

Bank of America strategists suggest that investors should sell U.S. stocks and dollars on rallies, warning that conditions for continuous rises are disappearing. The team led by Michael Hartnett states that the dollar is in a long-term depreciation process, and the trend of funds flowing out of U.S. assets will continue until the Federal Reserve starts lowering interest rates, the U.S. reaches a trade agreement with China, and consumer spending remains strong. After U.S. assets reached extreme valuations in 2024, they suffered setbacks this year as aggressive trade policies prompted investors to reduce their risk exposure.

Tariffs are threatening global economic growth and could exacerbate U.S. inflation, prompting investors to diversify risks when allocating assets. The S&P 500 Index once fell as much as 19% from its February high, then recovered nearly half of the losses as bargain hunters stepped in. The Bloomberg Dollar Index has fallen 6.3% this year.