The U.S. stocks will continue to rally in the 2025 according to a research note shared by Bank of America on Monday.
BofA’s equity and quantitative strategy team believes that the United States is poised for significant economic growth next year and sees stocks in financials, materials, utilities, real estate, and consumer discretionary sectors performing particularly well.
“We see more opportunities in stocks than the index,” Savita Subramanian, Managing Director at Bank of America Merrill Lynch, wrote in the note. “In particular, we like companies with healthy cash return prospects and a tether to the US economy: large cap Value stocks.”
BofA now forecasts that the S&P 500 will hit 6,666 points by the end of 2025. It is the third-highest target for the benchmark index, trailing only Yardeni Research and Deutsche Bank’s target of 7,000 points.
It also predicts that the U.S. economy will reach an annualized rate of 2.4% next year, representing a significantly more optimistic take compared to the consensus prediction of 2%.
After having a strong November, the U.S. stock market continued to run hot until December. S&P 500 gained 0.24% to close at 6,047.15 points on Monday for a new record. Tech-heavy Nasdaq Composite also surged to a new record, improving by 1% for a 19,403.95 close.