The S&P 500 may have surged 10 percent since its Feb. 11 low, but a Bank of America-Merrill Lynch strategist is warning the bounce is on very shaky ground.
Publicly traded companies have seen negative earnings growth two quarters in a row and there are no fundamental underpinnings for the rally, Savita Subramanian, BofAML's head of U.S. equity and quantitative strategy, said on CNBC's "Fast Money" this week.
"We are in a profits recession. There (are) no two ways around it," said Subramanian, whose S&P 500 price target of 2,000 is among the lowest on Wall Street. She is also concerned about how Federal Reserve monetary policy could affect stocks.
"You have the Fed embarking on a long, slow tightening cycle. Tightening into a profits recession doesn't sound like anything to throw a big party about," she said.
The result? Widening credit spreads and the capital markets basically shutting down, Subramanian said.