The head of US Equity Strategy at Bank of America Securities said that the market’s gains will be difficult to continue on current trends.
Appearing on CNBC’s Power Lunch, Savita Subramanian he says BofA has a year-end target of 7,100 for the S&P 500 and remains at the index level.
He says the best stock traded today is the Russell Large Cap Value Index, pointing to its income-generating portfolio. In the broader market, he sees opportunities for value and names around but cautions that the bulls that fueled last year’s gains will continue to improve.
Subramanian’s statement that 2025 was “the best year on record for the economy,” with individual investors, corporate buyouts, private equity firms, and government agencies all buying U.S. stocks at the same time. This dynamic, they say, will not repeat in 2026.
According to Subramanian:
“The good news is value. Usually the years when you have high income and GDP growth are not the best years for debt repayment. We are getting a big change in the demand for goods. That is why we are very low on the index. Within this process, I think there is a great opportunity to have high value areas in the market that are losing money instead of using it.”
Subramanian is also skeptical of the size of the earnings surprise, noting that analysts are predicting lower interest rates and stronger earnings than are already expected.
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