BofA's Hartnett: 'Detested Bull Market' to Deliver More Gains

Monday, 17 Jun 2013 08:37 AM

By Michelle Smith

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Prepare for more stock market gains because this detested bull market has further to run and the unloved financials are going with it, says Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch.

"This is one of the most detested bull markets of all time," Hartnett said at a conference, CNNMoney reported.

Stocks' multi-year rise has led to a camp of skeptical investors and traders who believe a correction is due. But that negative sentiment does not change this market's fate, which is to continue moving higher, according to Hartnett's predictions.

Editor's Note:
 
Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

Market participants have been spooked lately by fears that the Federal Reserve is preparing to rapidly taper its bond-buying programs and hike rates sooner than expected. The movement that followed a Wall Street Journal article highlights the volatility these concerns create.

The Journal predicted Fed Chairman Ben Bernanke would use the press conference after the Federal Open Market Committee's meeting this week to alleviate fears of a rapid exit. Bernanke will also allegedly assure the markets that there will be a "considerable" period between the end of quantitative easing and a rate hike.

Immediately after this article hit the wire, stocks soared, according to MarketWatch.

Hartnett isn't likely to be among the reassured because he does not foresee an approaching end to central banks accommodative practices.

In fact, his bullishness is based in part on expectations that accommodation will continue. He also expects modest economic growth and a continuation of the "great rotation" out of safe-haven assets to compliment those policies.

The result, he said, is more gains for stocks.

To aggravate matters for the doom forecasters is the positive outlook for housing and the benefits it will bring for financials.

Forbes described the steady housing recovery as "the big economic story that continues to baffle skeptics," but notes that investors are buying in. And their focus is not just limited to homebuilders; they are also moving into assets that feed off of housing.

"The banks were like a ghetto that investors refused to enter," Hartnett noted. "But they've been the best performers over the past 18 months."

Further strength in housing, means financials will be market leaders because investors will flock back into banking stocks, Hartnett predicted.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

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