Don’t Buy the First Rate Hike, Wait for Capitulation, BofA Says
- Megacap tech stocks were showing cracks pre-tightening: BofA
- Wait until deeper selloff or central banks reverse rate hikes
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The old stock market adage of “buy the first hike, sell the penultimate rate hike” could go wrong this time as inflation is out of control, according to Bank of America Corp.
“Little cracks” were appearing in megacap tech stocks, the epicenter of a 13-year bull market, before tightening even began, BofA’s Chief Investment Strategist Michael Hartnett wrote in a note. He remains bearish until investor positioning “shows full-blown capitulation” or a credit event on Wall Street causes central banks to announce a reversal of tightening.