Since the beginning of this year, the US stock market has hit new highs, with the S&P 500 index rising nearly 26% this year. As the dust settles on the US presidential election, whether the bull market can continue has become one of the most concerning topics for investors. According to Evercore ISI, a Wall Street investment bank, the rise in US stocks is far from over.
Evercore ISI analyst Julian Emanuel said that the bull market in the US stock market is still in its early stages, and the rally will accelerate during the upcoming presidency of Donald Trump.
Emmanuel predicts that the S&P 500 index will reach 6600 points by the end of June next year, which means there is still 11% room for the index to rise from its current level. He pointed out that Trump's relaxation of regulation may help increase corporate profits.
The prospect of Washington relaxing regulatory policies will drive the market higher, "Emanuel wrote in a report on Wednesday.
Emmanuel stated that Trump may take swift action to implement his policies upon his return to the White House. He said that measures such as relaxing regulations and reducing taxes for businesses will boost business activity and cause the stock market to soar.
Prosperity is ahead; President elect Trump will quickly take policy measures, and the stock market will also rise rapidly
He stated that the two-year bull market in the US stock market was driven by strong growth in large tech stocks, and high valuations will further rise. Expensive stocks will become more expensive, last longer, and yield greater returns, "he said.
Emmanuel stated that the bull market in the US stock market is still in its infancy. He pointed out that data shows that in a bull market environment, the average increase in the stock market over 50 months is as high as 152%, while the current market has only risen by 65% in the past 25 months.
He expects the S&P 500 index to continue rising until mid next year, following Trump's overwhelming victory in the presidential election earlier this week and the widespread optimism among investors.
On Thursday, with the Federal Reserve cutting interest rates by 25 basis points as scheduled, the S&P and Nasdaq reached new historical highs. As of the close, the S&P 500 index rose 0.74% to 5973.10 points. According to statistics, this is the 49th time this year that the index has reached a historic closing high, just one step away from reaching the 6000 point integer level.
This is the second consecutive day that the US stock market has set a record. The day before, following the announcement of the US election results, the three major US stock indices soared to historic highs, with the Dow Jones Industrial Average rising more than 1500 points.
It is worth noting that although the market generally believes that Trump's victory will boost US stocks, as his proposal to lower corporate taxes will benefit corporate profits. But some analysts are also concerned that some of Trump's policies, such as imposing tariffs on foreign countries and restricting immigration, will drive up inflation and interest rates, putting the stock market at risk.