BofA Global Research Expects 2025 to be a Year of Further Equity Market Strength Amid Macro Uncertainty
BofA Global Research forecasts strong market performance for 2025, projecting the S&P 500 to reach 6666 by year-end with over 10% upward potential and 13% earnings growth acceleration. The US economy is expected to outperform with 2.4% GDP growth in 2025, supported by improved productivity. The Federal Reserve is anticipated to cut rates twice (March and June) by 25 basis points each. US 10-year Treasury yields are expected to trade between 4-4.5%. While Chinese growth may slow to 4.5%, domestic stimulus measures should offset tariff impacts. European markets are predicted to experience a mid-year decline before recovering to current levels.
BofA Global Research prevede un forte andamento del mercato per il 2025, stimando che l'S&P 500 raggiunga i 6666 entro la fine dell'anno, con un potenziale di crescita superiore al 10% e un'accelerazione della crescita degli utili del 13%. Si prevede che l'economia statunitense superi le aspettative con una crescita del PIL del 2,4% nel 2025, sostenuta da un miglioramento della produttività. Si anticipa che la Federal Reserve taglierà i tassi due volte (marzo e giugno) di 25 punti base ciascuno. I rendimenti dei Treasury a 10 anni degli Stati Uniti dovrebbero scambiare tra il 4 e il 4,5%. Sebbene la crescita cinese possa rallentare al 4,5%, le misure di stimolo interne dovrebbero compensare gli effetti dei dazi. Si prevede che i mercati europei subiscano un calo a metà anno prima di riprendersi ai livelli attuali.
BofA Global Research pronostica un fuerte desempeño del mercado para 2025, proyectando que el S&P 500 alcance 6666 para fin de año con un potencial de crecimiento superior al 10% y una aceleración de crecimiento de ganancias del 13%. Se espera que la economía de EE. UU. supere las expectativas con un crecimiento del PIB del 2.4% en 2025, respaldado por una mejora en la productividad. Se anticipa que la Reserva Federal reduzca tasas en dos ocasiones (marzo y junio), en 25 puntos básicos cada vez. Se espera que los rendimientos de los bonos a 10 años de EE. UU. se mantengan entre el 4 y el 4.5%. Aunque el crecimiento chino pueda desacelerarse al 4.5%, las medidas de estímulo doméstico deberían compensar los efectos de los aranceles. Se prevé que los mercados europeos experimenten una caída a mitad de año antes de recuperarse a los niveles actuales.
BofA 글로벌 리서치는 2025년 강력한 시장 성과를 예측하며, S&P 500이 연말까지 6666에 도달할 것으로 보며 10% 이상의 상승 잠재력과 13%의 수익 성장 가속화를 예상하고 있습니다. 미국 경제는 생산성 개선으로 인해 2025년 2.4%의 GDP 성장률을 기록할 것으로 예상됩니다. 연방준비제도는 3월과 6월에 각각 25bp씩 두 차례 금리를 인하할 것으로 보입니다. 미국 10년 만기 국채 수익률은 4-4.5% 사이에서 거래될 것으로 예상됩니다. 중국의 성장률은 4.5%로 둔화될 수 있지만, 국내 자극책이 관세의 영향을 상쇄할 것으로 보입니다. 유럽 시장은 중반기에 하락한 후 현재 수준으로 회복될 것으로 예상됩니다.
BofA Global Research prévoit une forte performance du marché pour 2025, projetant que le S&P 500 atteindra 6666 d'ici la fin de l'année avec un potentiel de hausse de plus de 10% et une accélération de la croissance des bénéfices de 13%. L'économie américaine devrait surpasser les attentes avec une croissance du PIB de 2,4% en 2025, soutenue par une productivité améliorée. On anticipe que la Réserve fédérale réduira les taux deux fois (en mars et juin) de 25 points de base chacune. Les rendements des obligations à 10 ans des États-Unis devraient se négocier entre 4 et 4,5%. Bien que la croissance chinoise puisse ralentir à 4,5%, les mesures de relance intérieures devraient compenser les impacts des tarifs douaniers. Les marchés européens devraient connaître un déclin à mi-année avant de se redresser au niveau actuel.
BofA Global Research prognostiziert eine starke Marktperformance für 2025 und erwartet, dass der S&P 500 bis zum Jahresende 6666 erreichen wird, mit einem Aufwärtspotenzial von über 10% und einer Beschleunigung des Gewinnwachstums um 13%. Die US-Wirtschaft wird voraussichtlich mit einem BIP-Wachstum von 2,4% im Jahr 2025 besser als erwartet abschneiden, unterstützt durch verbesserte Produktivität. Es wird erwartet, dass die Federal Reserve die Zinsen zweimal (März und Juni) um jeweils 25 Basispunkte senken wird. Die Renditen der 10-jährigen US-Staatsanleihen werden zwischen 4 und 4,5% gehandelt. Während das Wachstum in China auf 4,5% sinken könnte, sollten inländische Konjunkturmaßnahmen die Auswirkungen der Zölle ausgleichen. Für die europäischen Märkte wird ein Rückgang zur Jahresmitte vorhergesagt, bevor sie sich auf das aktuelle Niveau erholen.
- S&P 500 projected to reach 6666 by year-end 2025
- Expected earnings growth acceleration to 13% in 2025
- US GDP growth forecast at 2.4% for 2025, above consensus
- Strong positive total returns expected for credit markets
- Two anticipated Fed rate cuts in 2025
- Increased policy uncertainty affecting market outlook
- Expected weakening in commodity demand growth
- Projected Chinese GDP growth deceleration to 4.5%
- European markets forecasted to see 7% downside through mid-year
- Emerging Markets facing short-term risks
Insights
BofA's ambitious S&P 500 target of 6666 for 2025 reflects strong confidence in US market dominance, supported by projected
Key catalysts include two expected Fed rate cuts in March and June, tight 10-year Treasury trading range of
Notable headwinds include policy uncertainty and potential trade tensions with China, though domestic stimulus measures are expected to maintain Chinese growth at
The forecast presents a compelling case for US market leadership in 2025, with cyclicals positioned to outperform. The productivity-driven growth narrative, combined with potential policy tailwinds from a Republican sweep, creates a favorable environment for equity investors. However, the ambitious S&P target implies significant multiple expansion amid macro uncertainties.
The commodities outlook suggests potential margin benefits for companies, with softening oil prices and oversupplied grain markets. Gold's projected peak at
BofA Economists and Strategists Forecast the US Economy to Continue to Outperform and the S&P 500 to Reach 6666 by Year-end
"In 2024, growth surprised to the upside and inflation moved in the right direction, allowing central banks to start easing, risk assets to perform well, and global equities to reach new highs," said Candace Browning, head of BofA Global Research. "But as we head into 2025, policy uncertainty has increased substantially. Many of the expected policy shifts should be positive for US equities, but a lot depends on their timing and how the rest of the world responds."
Key macro calls made for the markets and economy in the year ahead are:
- Further upside for the S&P and it could come quickly: Head of US Equity Strategy Savita Subramanian expects more than
10% upward potential for the S&P and earnings growth to accelerate to13% in 2025. - Improved US productivity should help economic growth, but policy changes should play a critical role for US and rest of world: Senior US economist Aditya Bhave estimates US GDP growth to come in at
2.4% year-over-year (yoy) in 2025 and2.1% yoy in 2026, which is above consensus partly due to improved productivity. A new mix of fiscal policies may be more supportive of US economic growth vs the rest of the world. - Fed expected to cut twice before pausing; US bond yields should remain in a tight range: In 2025, Bhave and team expect the Federal Reserve to cut interest rates by 25 basis points at its March and June meetings and then pause. Mark Cabana, head of US Rates Strategy, expects a relatively tight trading range for the US 10-year Treasury yield, around 4
-4.5% . - Key commodity prices, including oil, expected to soften: Francisco Blanch, head of Commodities and Derivatives Research, expects commodity demand growth to weaken, particularly on raw materials. Macro fundamentals suggest markets in 2025 will be oversupplied for oil and grains but more finely balanced for metals. After facing headwinds early in the year, gold should peak at
$3,000 - USD strength through 1H25 but then growth concerns lead to depreciation: Alex Cohen, senior FX strategist, expects the US Dollar to remain strong into the first half of 2025, around which time upside drivers should wane amid a less certain policy and growth outlook.
- Emerging Markets assets face a short-term risk, then likely improvement: Head of Global Emerging Markets Fixed Income Strategy David Hauner says that uncertainty about US policy is likely to send emerging markets lower, but investors may find a buying opportunity once there is more clarity on trade policy, especially if the US dollar peaks.
- US Cyclicals should outperform: Subramanian expects cyclical strength in 2025 for a variety of reasons, including the Republican sweep, productivity cycle, decades of underspending in manufacturing and light positioning in cyclicals.
- Demand for credit remains exceptionally strong: Our Credit Research team expects strong positive total returns for credit in developed markets next year, the third year in a row of strong performance.
- Expect Chinese growth to weaken but easing to offset tariff impact: Helen Qiao, greater chief
China economist and head of Asia Economics, expects real GDP growth forChina to decelerate to4.5% yoy in 2025 and domestic demand stimulus to offset any impact from tariffs with a lag. - Euro area equity market to see downside through mid-year, then a recovery. Sebastian Raedler, head of European Equity Strategy, expects
7% downside to the Stoxx 600 followed by a recovery close to current levels.
BofA Global Research
The BofA Global Research franchise covers approximately 3,500 stocks and 1,250 credits globally and ranks in the top tier in many external surveys. Most recently, the group was named No. 2 Global Research Firm of 2023 by Institutional Investor magazine; No. 1 in the 2024 Institutional Investor Developed Europe survey; No. 1 in the 2024 Emerging Europe,
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SOURCE Bank of America Corporation
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