Source: Caixin.
Wells Fargo & Co believes that the bull market in US stocks will continue; taking history as a mirror, the US stock market has risen by an average of 41.8% during the past three US presidential elections. The bank predicts that the S&P 500 index will reach a historical high of 5700 points before the end of next year.
With the continuous surge of the US stock market, investors have not only begun to worry about when this bull market will come to an end.
However, according to the data of the investment department of Wells Fargo, the bull market should continue for a long time: During the past three US presidential elections and the following year, the US stock market rose by an average of 41.8%.
This year is the US presidential election year, the US stock market has performed well, and the S&P 500 index has risen by more than 10% as mid-year approaches.
It will hit a new high in 2025.
The Wells Fargo Investment Institute stated that although it may be too optimistic to hope that the US stock market will hit a new high before the November US election, the election-related rally is likely to further expand in 2025.
Jeremy Folsom, an investment strategy analyst at the bank, wrote in the latest report on Monday: "So far, the performance of the S&P 500 index in 2024 is outstanding compared to previous election years. Looking ahead to 2025, based on historical performance and our goals, we see potential upside."
The chart below shows the average performance of the S&P 500 index during the election year and the following year since 1948.
"This year's performance is far higher than the average level of this stage of the cycle, and it is one of the best performances so far," Folsom wrote.
He predicts that the S&P 500 index will hit a historical high of 5700 points by the end of next year, partly because the US stock market recorded huge gains before and after the US presidential elections in 2012, 2016, and 2020.
The team further explained that from early 2012 to the end of 2013, the S&P 500 index rose by 47%, and there was also a substantial increase during the two subsequent US presidential elections.
Folsom also said, "In addition, although current cash and cash substitutes are attractive, considering that the Fed is about to end the era of high interest rates and begin to cut interest rates, we do not believe that holding cash for the long term is a good choice."
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