BofA's Banks Says S&P 500 Could Reach 2,600 Before PullbackBy
The S&P 500 Index could reach 2,600 as the global economy improves and corporate earnings climb, said Keith Banks, president of Bank of America Corp.’s U.S. Trust unit.
“It’s natural to get nervous when you’ve seen the run that we’ve seen, but what I would bring things back to are underlying fundamentals,” Banks said Friday in an interview on Bloomberg Television. “We’re in the midst of a globally synchronous recovery. It’s been a while since we’ve seen all the cylinders firing at the same time, and they are.”
The S&P 500 rose 11 percent since U.S. President Donald Trump’s election to 2,381 on Thursday as investors anticipate less onerous regulations and an increase in infrastructure spending. Banks said he sees the index rising to 2,450 or 2,500 by the end of the year.
Political turmoil in Europe, including the possibility that populist Marine Le Pen wins the French presidency this year, could depress stock prices, Banks said.
“There are things to worry about,” Banks said. Still, “people have talked themselves out of the market for five years and have missed returns. We think the underlying fundamentals are positive,” he added.
Banks said he would “buy into” a stock market pullback, adding that his firm likes technology and health-care companies, particularly biotechnology, because they have been drivers of growth.
— With assistance by David Westin, Alix Steel, and Jonathan Ferro