Good news in the form of greater vaccine distribution could be bad news for investors, according to Bank of America chief investment strategist Michael Hartnett.
As the U.S. inoculation program against Covid-19 accelerates, Hartnett warns that the progress, combined with a variety of trouble signs, could conspire against the U.S. equity market, particularly in the earlier part of the year.
Investors should "watch for [a] 'good news is bad news' narrative," he said in a note sent to clients. The term refers to caution that when conditions get too robust, as it can be a contrarian sign that the best scenarios are already priced into the market and it's time to pull back. The S&P 500 is up 78% from its March pandemic low in anticipation of a reopening of the economy.