Hartnett: "We Still Remain Bearish Because The Math Does Not Add Up"

With his formerly bearish colleagues flipping bullish one by one (and even Goldman's chief strategist David Kostin finally capitulating and raising his year-end S&P price target from 4,000 to 4,500), it's becoming lonely, not to mention difficult, to remain skeptical of the market but for now Bank of America's CIO Michael Hartnett has shown a commendable persistence in staying true to his convictions. Which unfortunately does not make him right, but at least his weekly insights provide color on i) why we are here and ii) where we may be going when rationality returns to the market.

Addressing the former, in his latest weekly Flow Show note (as usual available to professional subs), Hartnett writes that as the "recession fears of Q1" are melting into the "Goldilocks greed of Q2"; the result is euphoria:

• the broad NYSE index (US/global stocks + bond ETFs) is annualizing 7.7% total return,
• IG annualizing 7.5%,
• S&P500 breaking out bull market bubbly (although excluding the "Magnificent 7", the S&P is up a teeny 1.2% YTD);