There is a strong consensus among Wall Street strategists regarding the outlook for 2025, which is Bullish on financial stocks.

The catalysts are obvious. Wall Street professionals believe that the strong economy in the USA, the expectation that elected President Donald Trump will ease regulations, attractive valuations for companies, and lower interest rates will create a more favorable environment for Banks and Trade.

Wells Fargo & Co's Chris Harvey recently emphasized in a report to clients that the financial Industry has attractive pricing, and Fund managers "will eventually need to pay attention to this area."

Brian Belski of the Bank of Montreal wrote in his 2025 outlook that although financial stocks remain "very unpopular," their earnings growth expectations are strong and valuations are compelling.

Goldman Sachs' Senior Analyst Alex Blostein said in an interview last week, "About $7 trillion in Cash / Money Market funds are starting to enter the market. It will begin in the fixed income sector and may expand to the Stocks sector. All these factors seem very beneficial for the financial Industry in 2025."

The market has also begun to gradually reflect this optimistic sentiment. Following Donald Trump's election victory last month, the financial SPDR Fund (XLF) surged. Since the election results were announced on November 5, the financial Sector has been one of the best-performing sectors, with an increase of nearly 7%, outperforming the S&P 500 Index.

Optimistic sentiment is spreading.

Optimistic sentiment is not limited to strategists and analysts; the management of these major Banks has also revealed this sentiment. Bank of America's CEO Brian Moynihan expressed confidence in the USA economy under Trump's leadership at last month's investment conference, forecasting that the government would "quickly get started."

At last week's Goldman Sachs financial services conference, executives from JPMorgan and Goldman Sachs also expressed similar optimism. Goldman Sachs Chief Financial Officer Denis Coleman stated that he sees a "surge of optimism" for 2025, noting that "the confidence of CEOs and clients will certainly grow, as they believe there may be more large-scale trades and more strategic activities."

JPMorgan's CEO of Consumer and Community Banking, Marianne Lake, also expects that investment banking business expenses will surge.

Aadil Zama of Wall Street Alliance Group stated, "Financial stocks are influential. The Federal Reserve's interest rates will decline, and Banks will benefit from increased investment banking activity."

JPMorgan's Head of USA Investment Strategy for Private Banking, Jake Manoukian, mentioned that his team is looking at the financial Industry and Asset Management Industry for their 2025 portfolio, emphasizing that "it is clear that the Trump administration will be friendlier towards Wall Street and trading activities."

In addition, the gradual recovery of the IPO market is seen as another favorable factor for boosting the financial sector. Although IPO activity is still far below the peak levels of 2021, its pace is accelerating. Dealogic data show that since the beginning of this year, 158 companies have gone public in the USA through traditional IPOs, representing a 35% increase from 2023.

It is anticipated that this trend will accelerate next year, as a better economy and lower interest rate environment are expected to encourage companies to no longer wait and see. Last week, the software company$ServiceTitan (TTAN.US)$The performance on the first day of its listing was strong, with its stock price soaring over 40% in the first day of trading, further boosting bullish sentiment.

Editor/rice