Wall Street's optimism heats up again! Wells Fargo: S&P 500 may target 7,007 in 2023

Zhitong Finance APP noticed that Wall Street's forecast for the stock market in 2025 has been raised to a new high. On Tuesday, Christopher Harvey, a stock strategist at Wells Fargo, and his team expect the S&P 500 to rise to 7,007 by the end of 2025, the highest target among Wall Street strategists, and predict that the S&P 500 could rise more than 26% next year. The target is only seven points higher than Deutsche Bank and Yardeni Research's forecast that the S&P 500 will close at 7,000 in 2025. Harvey wrote in his 2025 stock outlook that "overall, we expect a more favorable macro environment for the stock market under the Trump administration, and the Fed will gradually cut interest rates." "In a nutshell, this is the backdrop for the stock market to continue to rise." Harvey added that the stock market will rise in an environment where corporate profit margins continue to expand, the US economy grows faster than the current consensus of 2.1%, and "merger and acquisition activity picks up slightly by the end of 2025." Harvey saw a similar script to Bank of America's 2025 outlook, which argued that US economic growth would drive cyclical sectors. Harvey believed that "GDP revisions and regulatory environment will catalyze cyclical opportunities." This includes predicting that weighted indexes such as the S&P 500 would perform well in 2025, which is not affected by the over-performance of large stocks such as the S&P 500 index. In other words, Harvey is the latest voice on Wall Street to expect the market rebound to continue to expand from the "Big Seven" tech stocks to the other 493 stocks in the S&P 500. Harvey wrote in the report that he originally wanted to "tend to be contrarian" considering the bullish sentiment, high stock valuations and already solid economic growth. But Harvey wrote that "the data does not support" a weak or negative performance of the S&P 500 this year. "2025 may be a year from solid to strong."