Bradesco BBI’s stock strategy director Ben Laidler believes that the bull market is in its early stages, driven by anticipated profit recovery and potential Fed rate cuts.
He forecasts a potential 15% stock gain over five years, supported by expected 100% annual profit growth and lower interest rates facilitating expansion.
Since May 2022, the S&P 500 index has risen X% driven by optimism in the AI sector, setting historic highs for stocks like Nvidia and Apple.
In 2024, the Dow Jones Industrial Average crossed 40,000 points, and the S&P 500 surpassed 5,000 points, with a robust 15.3% surge in the first half of the year, marking one of the strongest starts since 1950.
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Latest economic data shows a 4.1% rise in US unemployment rate.
The upcoming earnings season, starting with JPMorgan Chase and Wells Fargo, will test Laidler’s predictions. FactSet forecasts S&P 500 companies’ Q2 earnings to grow by 500%—the highest since early 2022—signifying four consecutive quarters of growth.
Laidler emphasizes that with profit recovery and expectations of rate cuts, the market is underpinned by fundamentals. Despite recent gains, Goldman Sachs portfolio manager Brooke Dane remains bullish on artificial intelligence (AI) stocks.
