"US stock market rebound is about to peak? BofA strategist warns: beware of 'good news' coming to an end"

Michael Hartnett, chief investment strategist at Bank of America, warned that despite expectations of easing trade policies driving a recent sharp rebound in US stocks, this upward trend may be nearing its end. In his latest research report, he pointed out that investors need to beware of the classic trading logic of "buy the rumor, sell the fact" - when policy benefits actually materialize, the market may instead turn to a correction due to the overextension of previous gains. Since President Trump announced the suspension of some tariffs on China on April 9th, the S&P 500 index has risen by 14%, but it is still down 3.7% year-to-date, significantly lagging behind other major global markets. However, there have been recent signs of relaxation in trade policies: news of possible significant tariff reductions in the weekend talks between the US and China, as well as a "breakthrough" trade framework agreement between the Trump administration and the UK, have continued to boost market sentiment. In addition, Hartnett has given a clear recommendation on asset allocation: in 2025, there should be a focus on "heavy on debt, light on stocks," with a preference for international markets over the US domestic market in equity assets. He analyzed that current US stocks are in the "late stage of a structural bear market," significantly lagging behind non-US stock markets in terms of value. Fund flow data also supports this view - Bank of America cited EPFR Global data showing that the US stock market saw net outflows of $24.8 billion in the past four weeks, marking the largest weekly outflow in two years. The market is closely monitoring the progress of two major events: the tariff negotiations between the US and China this weekend, and the details of the "breakthrough" trade framework agreement between the Trump administration and the UK. Hartnett reminds investors that even if tariff reductions are ultimately implemented, they may still face the classic scenario of "good news being bad news," and investors need to closely monitor the match between policy details and corporate profit prospects.