Bank of East Asia: Expects better performance of US stocks in Q1 2025, with the S&P 500 reaching a high of 6,335 points
East Asia Bank's Chief Investment Strategist Li Zhenhao expects that the performance of U.S. stocks in the first quarter of 2025 will outperform other regions, with the S&P 500 index fluctuating between 6178 and 6335 points. The healthcare, consumer discretionary, technology, materials, and industrial sectors are expected to perform well. The risk forecast bottom is around 5420 points, suggesting a potential downside of nearly 10%. The expectation of global multipolarization will trigger international friction, and Trump-style "America First" policies may affect trade relations. Corporate bonds and emerging dollar bond markets are expected to be supported, with the 10-year yield range between 4.25 and 4.36%
According to the Zhitong Finance APP, East Asia Bank's Chief Investment Strategist Li Zhenhao stated that for the investment market outlook in the first quarter of 2025, under the "red tide" and "America First" policies, the performance of U.S. stocks is expected to outperform other regions. Based on past U.S. stock earnings and recent price-to-earnings ratios, the S&P 500 index is projected to fluctuate between 6178 and 6335 points this quarter. Comprehensive analysis indicates that within the U.S. stock sectors, healthcare, consumer discretionary, technology, materials, and industrials are expected to perform well. Additionally, he mentioned that the bottom of the risk forecast range is around 5420 points, which is nearly 10% lower than the level above 6000 points, suggesting that the index may experience an upward wave only after adjustments, and investors should pay attention to risk management.
Li Zhenhao mentioned that the expectation of global multipolarization will lead to various international frictions, with Trump-style "America First" excluding allies. For example, the EU and the UK may fall into a situation where both China and the U.S. impose tariffs simultaneously, and China is also on high alert, indicating that trade relations among all parties are likely to be reshuffled.
He continued to state that if Trump returns to the White House, corporate bonds and the emerging dollar bond market are expected to receive support, and changes in interest rates will benefit corporate bonds. After Trump's inauguration, the risk in the European bond market is expected to rise, but there are still considerable options in the Asian region. The forecast for the 10-year yield range is 4.25% to 4.36%, while the 2-year range is expected to be 3.67% to 3.98%