A Democratic midterm sweep could make bonds the fourth-quarter contrarian play, says B. of A.’s Hartnett

Bank of America strategist Hartnett suggests a Democratic midterm sweep could establish bonds as a contrarian play for the fourth quarter. According to the author of Flow Show, lower growth assumptions and weaker stocks would increase the appeal of bonds. Such a political outcome might shift market dynamics, favoring bonds over equities while potentially triggering increased market volatility and policy changes. This shift would position bonds as a strategic alternative amidst changing economic expectations and political landscapes.