Bank of America Merrill Lynch is bullish on America – American stocks anyway.

Ironically enough, it’s the recent rally in bonds that will produce further upward momentum for stocks, according to Bank of America Merrill Lynch Global Research, Forbes reports.

Companies have gathered so much money issuing bonds that they'll use some of it to buy back their own shares, the report says. And that, of course, would boost stock prices.

Corporations are exhibiting a "fortress" mentality to improve their balance sheets by building cash reserves and "deleveraging and extending debt maturities to reduce liquidity risk," the report says.

Money managers around the world are urging companies to use their bulging cash reserves to boost their dividend payments, buy back their shares or acquire other companies or assets.

During the last 10 years, when big investors have made those requests, share buybacks have been the result, the report says.

Stocks are now dropping amid concern the Federal Reserve’s quantitative-easing program won’t be as big as expected. But that’s a misplaced concern, says Michael Holland, who oversees more than $4 billion as chairman of Holland & Co.

“Investors’ disappointment seems to be myopic,” he told Bloomberg. “It’s common sense that the Fed wouldn’t be taking any aggressive step right now because that could cause serious damage for the economy in the long run.”