Deutsche Bank said the bull market is expected to continue into 2025, driven by strong investor demand for stocks and strong corporate activity such as buybacks and other spending, as it called for the S&P 500 to rise to its highest level. Binky Chadha, chief global strategist at Deutsche Bank, has set a target of 7,000 points for the S&P 500 by the end of 2025, which would mean a 17% increase from current levels. “We see strong equity (and bond) inflows continuing, driven by strong risk appetite,” Chadha said in a note to clients. “We expect S&P 500 buybacks to grow from current levels The annual run rate of US$1.1 trillion rises to approximately US$1.3 trillion next year, consistent with profitability levels. We believe that even with conservative assumptions, the supply and demand backdrop for the US stock market remains solid, pushing the S&P 500 to around 7,000 next year. .SPX Year-to-date High S&P 500 The benchmark just hit another intraday record on Monday, with the S&P 500 poised to end 2024 on a strong note thanks to optimism about President-elect Donald Trump’s market-friendly policies. That brings November gains to about 5%, with gains set to rebound to 25.5% in 2024 (excluding reinvested dividends) in 2025, driven by possible tax cuts and deregulation by the incoming Trump administration. The U.S. economy will see stronger growth, however, the German bank warned that Trump’s protectionist trade and immigration policies could also threaten its bullish thesis. Major downside risks are more likely to emerge. “This could be more detrimental to economic growth and push up inflation. This would lead the Fed to stop the (interest rate) cutting cycle and may even consider raising interest rates again, which could put upward pressure on bond yields.” Deutsche Bank It’s not the first Wall Street firm to issue an upbeat stock outlook following the presidential election. UBS recently said that the so-called “Roaring ’20s” period for the stock market will continue, with the S&P 500 rising again next year, reaching 7,000 points in the most optimistic case. Goldman Sachs predicts that the stock market will rise 11% in 2025.
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