Bank of America Sees Double-Digit Stock Market Returns in 2025 with Top Sectors Poised for Big Gains

Bank of America Sees Double-Digit Stock Market Returns in 2025 with Top Sectors Poised for Big Gains

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Bank of America is painting a bullish picture for the stock market in 2025, forecasting double-digit returns with a potential upside of 11% from current levels, driven by select sectors poised to benefit from the new administration’s policies. The Wall Street firm has set its 2025 S & P 500 target at 6,666, a figure that implies a substantial increase from the current market value. Notably, the firm believes that while the broad benchmark is expected to continue its upward trajectory, savvy investors will find attractive buying opportunities in individual companies with a strong potential to return cash to shareholders and a direct connection to the US economy. “We identify more compelling opportunities in individual stocks than in the index itself,” Savita Subramanian, BofA Securities head of U.S. equity and strategy, revealed in a note to clients, highlighting companies with robust cash return prospects and a strong link to the US economy as particularly appealing. .SPX YTD mountain S & P 500 In particular, BofA is optimistic about financials, discretionary spending, materials, real estate, and utilities, anticipating a significant boost in these sectors. The firm expects bank stocks to reap the benefits of a resurgence in merger and acquisition activities, as well as growing optimism surrounding deregulation under the new administration, while real wage growth, a potential outcome of the president-elect’s protectionist policies, is expected to fuel discretionary spending. Furthermore, increased infrastructure spending during the new administration may provide a sustained tailwind for old economy sectors such as utilities, materials, energy, and real estate, according to BofA. BofA joins a group of Wall Street firms predicting strong returns after the presidential election, including Deutsche Bank, which foresees the S & P 500 reaching 7,000 in 2025 on the back of rising risk appetite. UBS has also predicted a prolonged “Roaring 20s” period for stocks, while Goldman projects an 11% S & P 500 return for next year, aligning with BofA’s forecast.

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