Main US indexes gain; S&P 500 out front, up ~0.5%
Utilities leads S&P 500 sector gainers; Comm Svcs sole loser
Dollar down; crude gains; gold up ~2%; bitcoin up ~5%
US 10-Year Treasury yield falls to ~4.06%
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A NEW ERA FOR INDUSTRIALS?
Investors have favored big tech stocks and high-quality bonds for years, but these assets have become expensive. Going forward, Bank of America sees better opportunities elsewhere – within an industrial renaissance.
Analysts led by Jared Woodard say there are signs of a new U.S. industrial era, supported by strong manufacturing data and potential banking deregulation that could unlock over $1 trillion in new lending.
Bank of America's indicators show industrial momentum at its best levels since 2021, with tight truck capacity and rising demand.
The main barrier has been restrictive credit conditions, but reforms could ease this. The data suggests GDP growth could reach 3-4%, above expectations.
Similar strength appears globally, with Korean exports pointing to strong worldwide earnings growth.
To take advantage of this shift, Bank of America recommends investors look to small- and mid-cap stocks in industrials, materials, banks and defense. Foreign stocks with deep capital markets are also attractive, particularly in Asia, along with real assets and commodities.
These areas remain underinvested, but are now leading returns in 2025 as the economic environment changes.
(Karen Brettell)
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EARLIER ON LIVE MARKETS:
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LUCKY 13: CORE CPI NUDGES CLOSER TO FED INFLATION TARGET CLICK HERE
US STOCKS STRUGGLE EARLY, YIELDS UNDER PRESSURE CLICK HERE
US STOCK FUTURES FIRM UP SLIGHTLY, YIELDS SLIP, AFTER SOFT CPI CLICK HERE
GRIT IN THE OYSTER - GOLDMAN ON CENTRAL BANK DISSENTERS CLICK HERE
AI DISRUPTION IS NOT A NEGATIVE - JEFFERIES CLICK HERE
LUXURY STRUGGLES ON L'OREAL RESULTS CLICK HERE
EUROPE BEFORE THE BELL: NOT ANOTHER AI-INDUCED SELLOFF CLICK HERE
MORNING BID: NO LONGER THE APPLE OF THEIR EYE CLICK HERE