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Bank of America lays out its scenario for how the next big top in stocks will form– and determines the trigger that could trigger a crisis soon after

Bank of America lays out its scenario for how the next big top in stocks will form– and determines the trigger that could trigger a crisis soon after
Spencer Platt/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The stock market is undergoing a final melt-up that will culminate in a top sometime between election day and the inauguration, according to Michael Hartnett, the chief investment strategist at Bank of America.  He says investors…

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  • The stock market is going through a last melt-up that will culminate in a top sometime between election day and the inauguration, according to Michael Hartnett, the primary financial investment strategist at Bank of America.
  • He states financiers are front-running excellent news consisting of financial stimulus and a vaccine, both of which might come over early next year.
  • He even more determines how the rally will be short-circuited as soon as these catalysts are out of the method and the top is reached.
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The 3,600 level on Hartnett’s radar is the upper end of a 3,300 -3,600 band he had expected the S&P 500 to trade in between August and January 2021.

Hartnett likewise expects that financiers will front-run a COVID-19 vaccine– another variable that so much of the future outlook is hinged upon.

Last– and definitely not least– the last melt up will be driven by a Federal Reserve that is supporting the market in an unprecedented manner.

The question now is, what occurs when stocks reach the cliff’s edge, which Hartnett pinpoints at 3,600 for the S&P 500?

The relationship in between both asset classes has actually been unusual this year.

Hartnett is now flagging that this relationship might return to regular, and higher yields would damage the evaluations that investors have assigned to stocks.

Get the current Bank of America stock price here.

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