①The s&p 500 index soared 26% in 2023, with a potential increase of 27% this year, and investors are focusing on the trend of the US stock market in 2025. ②Wells Fargo & Co predicts that the s&p 500 index could reach 6,600 points by the end of next year, recommending investors to buy on dips and ignore short-term fluctuations.
On December 3, Caixin reported (Editor Huang Junzhi) that the s&p 500 index surged 26% in 2023, with prospects for a further 27% increase this year. As 2024 comes to a close, investors are now more concerned about the future of the US stock market next year.
Considering recent statements from Wall Street giants, they are generally optimistic about the US stock market in 2025. Wells Fargo & Co is the latest to express this view.
Scott Wren, Senior Global Equity Strategist at Wells Fargo Investment Institute, stated on Monday that he is optimistic about the stock market next year, bullish on the US stock market rather than international markets. He believes that the s&p 500 index is likely to rise to 6,600 points by the end of next year.
In an interview, he suggested that investors should ignore any short-term fluctuations and instead buy on dips. He added that since October 2023, there have been few declines, with only one pullback occurring in August this year.
"So, we are tilting towards stocks, leaning towards sectors such as financials, industrials, and communications services. We like the energy sector, and if oil prices are in the range of $65-70, we hope to increase our holdings in energy stocks," he said.
"At the same time, Wren also mentioned that due to concerns about inflation and the uncertain future of Fed rate cuts, there is a possibility of a pullback in the US stock market. However, this presents a good opportunity to buy on dips."
"I believe these factors might lead to some downward fluctuations, and we want to be ready to enter the market at opportune moments because we believe the US stock market and the s&p 500 index will continue to rise through the end of 2025," he added.
Wren emphasized that he believes the U.S. stock market is in a better position compared to international stock markets. Looking ahead, it is difficult to determine the impact of the new tariffs imposed by the Trump administration, he said, noting that this may affect inflation in the short term.
"The purpose of these tariffs is to build industry and manufacturing in the United States. So, I think the ultimate goal is good, but from now until then, what will happen with inflation, that's where things become uncertain," he said.
Similarly, JPMorgan strategist Mislav Matejka also expects that unless geopolitical and trade policy risks recede, the U.S. stock market will continue to outperform global markets next year.
"The current phase of divergent performance in regional markets may continue. Although the valuation multiples in international markets are not high, while the U.S. market seems overvalued, the gap between them may remain at a relatively high level for a period of time," he added.
Wall Street strategists are setting higher and higher target prices. Both Goldman Sachs and Morgan Stanley predict that by the end of 2025, the S&P 500 index may touch 6500 points, citing continuous U.S. economic growth, strong corporate earnings, and the Fed's path of interest rate cuts.
Bank of America Merrill Lynch predicts that by the end of 2025, the S&P 500 index is expected to reach 6666 points. UBS Group and Deutsche Bank have even called out a target price of 7000 points. UBS believes there could be a renaissance of the famous "roaring twenties" prosperity from history.
Editor/Lambor
