Wall Street strategists are rallying around bank stocks as the top investment choice heading into 2025. Optimism is fueled by several key factors: a strong U.S. economy, expectations of deregulation under President-elect Donald Trump, competitive valuations and lower interest rates.
Investment teams at major companies such as Deutsche Bank, Goldman Sachs, UBS, Barclays, Société Générale and JPMorgan Chase have advised prioritizing stocks and shares for the year ahead.
High-profile analysts such as Bank of America’s Savita Subramanian, BMO’s Brian Belski and Wells Fargo’s Chris Harvey are among those emphasizing the appeal of financial stocks.
In a recent note to a client, Harvey highlighted the undervaluation of the sector and urged money managers to shift their focus toward financial stocks. Similarly, Belski’s 2025 outlook reiterates that financial sectors remain “drastically underappreciated” despite strong earnings growth forecasts and attractive pricing.
US stocks lead global markets
Wall Street analysts generally agree in maintaining a preference for large American companies. The S&P 500 Index is on track to generate an exceptional total return of over 25% for the second year in a row, a feat economists say is rarely seen.
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Some analysts have recognized opportunities abroad, but most see the US market as a cornerstone of growth, especially as leadership moves away from Big Tech and into sectors such as finance and utilities.
U.S. stocks now account for more than half of the global stock market’s value, their highest share since late 2001. The increased market activity is driven by superior earnings growth among the largest U.S. companies, according to data from FactSet. .
Barclays U.S. chief equity strategist Venu Krishna noted that earnings prospects remain strong, with big tech companies still leading growth while other sectors slowly gain ground. The Trump administration’s proposed tax cuts and deregulation measures could further boost corporate profits and economic expansion through increased deficit spending.
Economists: US stocks are generating a huge influx of capital
JPMorgan’s global strategy group, led by Dubravko Lakos-Bujas, predicts that these sectors will benefit from an influx of capital. His sentiments were echoed by Alex Blostein, a senior analyst at Goldman Sachs, who noted that roughly $7 trillion parked in money market funds is beginning to flow into the market, starting with fixed income and potentially moving into stocks.
Trust in finance is not limited to analysts. Senior banking executives have expressed similar sentiments and project a strong 2025 for the sector. In the last month investment conferenceBank of America CEO Brian Moynihan conveyed confidence in the U.S. economy under the Trump administration and predicted swift policy action.
Executives from JPMorgan Chase and Goldman Sachs echoed this optimism during the Goldman Sachs Financial Services conference. Denis Coleman, chief financial officer at Goldman Sachs, cited “high levels of optimism” ahead of 2025, while Marianne Lake, executive director of consumer and community banking at JPMorgan, predicted an increase in investment banking fees driven by the increase in strategic transactions.
“We’re seeing an acceleration in customer dialogue,” Coleman said.
Analysts aware of Bitcoin progress
Meanwhile, Tom Lee, head of research at Fundstrat Global Advisors, believes Bitcoin (BTC) will reach $250,000 by the end of 2025. Lee has cemented his reputation for making accurate market forecasts, successfully predicting the 24% rally in S&P 500 in 2023 and its rise. to 6,000 points in 2024.
Lee has been bullish on Bitcoin, forecast Its price would exceed $100,000 this year, a prediction that came true. His investment thesis revolves around rising demand for Bitcoin due to spot ETFs, reduced supply following the block subsidy halving, and favorable interest rate trends.
Despite his optimism, Lee warned of possible volatility in early 2025, with Bitcoin prices possibly falling to $60,000 before rebounding to $250,000 by the end of the year. He advised investors to approach Bitcoin with conviction, noting that its annual gains often occur in a short 10-day period.
On the other hand, veteran Wall Street investor Dennis Gartman has dismissed the current BTC rally as a solid investment case, saying he prefers gold over the digital currency.
during a interview Writing in Bloomberg, Dennis Gartman expressed surprise at Bitcoin’s recent rise beyond $100,000, comparing the cryptocurrency’s rise to historical speculative bubbles. The chairman of the University of Akron’s Investment Committee drew parallels to the tulip mania in Holland in the 16th century and the dot-com bubble of the late 1990s.
“This reminds me too much of the tulip bulb craze and the high-tech craze of the late 20th century.Gartman commented. “I’ll let others buy it; I will avoid it.”
Gartman also criticized Bitcoin’s reputation as “digital gold,” arguing that the cryptocurrency’s limited track record falls short of gold’s long-standing value as an asset.
“Bitcoin has been valued at some price for months. Gold has been valued as an asset for centuries,” said. “I prefer the centuries bet to the monthly bet almost any time..”
Despite his skepticism, Gartman clarified that he has no intention of shorting Bitcoin. “I’ll leave it to people wiser or bolder than me.”he added.
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