Stock market investors have been rewarded in 2021, the S
The record rally has prompted some bear market strategists to reflect on the “bright side” of stocks, as their value targets lagged behind additional benchmarks. This appears to be the case for Bank of America’s quantitative and equitable analyst, Savita Subramanian, who has maintained a downward stance on equities due to peak valuations and ever-boiling investor sentiment.
Subramanian has a year-end target of 4,250 for the S
These are the six points that can contribute to a 36% buildup in stocks, according to Bank of America.
1. “It’s underestimating American companies. “
“The current labor shortage and offshoring projects would likely drive corporations to automate, leading to additional power gains. The commercial and customer sectors would get the maximum advantages from automation gains, given their higher work intensity. Increased spending on automation. “
2. “The fiscal coup can be simply manageable. “
3. Actions offer functionality and protection against inflation.
“Commodities provide hedge against inflation, bonds provide income, but neither provides both. Stocks are in the right position to provide hedging and profitability against inflation. “
4. Public debt has had results in the past.
“Public debt/GDP is above 1. 2 x GDP (a record level), well above corporate/household/GDP debt. But past public debt/GDP peaks ended well. In the first case, GDP outpaced debt growth and stocks recorded higher yields and after periods of large public debt. And going forward, based on Biden’s modified Build Back Better plan, our economists estimate that the deficit expansion will be smaller than expected. “
“A small-cap bull market may also recommend a bullish threat to our long-term S forecast.
6. “The record duration of inventory aspect”.
“We cite the equity record of the S