Bank of America Analysts Bullish on U.S. Equities: Growth is Key to Market Momentum
Bank of America analysts are confident in the continued upward trajectory of U.S. equities, as long as economic growth remains stable. In a recent note, the investment bank's analysts highlighted the importance of growth for the market, stating that equities can withstand a less-dovish Fed as long as growth is supported.
The market's focus has shifted from inflation to growth, with stocks reacting more strongly to growth data in recent months. Bank of America emphasized that stocks do not necessarily need aggressive rate cuts from the Federal Reserve, but rather a signal that growth will be supported.
The analysts outlined three main reasons for the ongoing rotation into equities: easing rate pressure, supported growth, and broadening earnings. Despite the potential for gains, Bank of America expects that market momentum could be capped leading up to Nvidia's earnings next week.
Looking ahead, the analysts anticipate the Fed to cut rates twice this year, in September and December. Bank of America believes that growth will be the driving force behind stock performance for the remainder of 2024, suggesting that slow and steady economic growth could propel stocks higher.
In conclusion, Bank of America's bullish outlook on U.S. equities underscores the importance of economic growth in sustaining market momentum. Investors should keep an eye on key indicators of growth and the Fed's rate decisions to make informed investment decisions.