How to select US stock ETFs in 2025? Oppenheimer recommends buying the S&P Capital Markets ETF (KCE.US) on dips.

Analysts from the top investment firm Oppenheimer Asset Management on Wall Street recently released a research report, stating that investors should take advantage of periods of relative consolidation or brief declines in the "SPDR S&P Capital Markets ETF" (KCE.US) before it resumes its long-term leadership in the financial market by buying on dips. Last Friday, the SPDR Capital Markets ETF briefly fell below $144, but quickly rebounded above $144, and on Monday, driven by buying on dips, the ETF closed at $144.950. Its increase so far this year is as high as 45%, significantly outperforming the S&P 500 index. Ali Wald, Oppenheimer's technical analysis director, stated in a report, "The SPDR S&P Capital Markets ETF still ranks first in our ETF momentum ranking, second only to the two popular banking ETFs - KBE and KBWB." "The broad industry advantage of the S&P Capital Markets ETF enhances our confidence in investing in this ETF." Looking ahead to the stock market in 2025, Oppenheimer Asset Management stated in the research report that due to strong economic growth in the United States, the S&P 500 Index will reach a record high of 7100 points by the end of next year. The forecast for the S&P 500 Index in 2025 is the "wildest target" among Wall Street peers, exceeding the 7000 points previously given by Deutsche Bank Aktiengesellschaft and Yardeni Research, as well as the 7007 points given by Wells Fargo & Company's market strategy team. John Stoltzfus, Chief Stock Market Investment Strategist at Oppenheimer, stated in the latest report that the fundamentals "suggest that the current resilience of the US economy and stock market could continue into next year." Looking ahead to the stock market in 2025, almost all Wall Street strategists expect the US stock market to continue to rise, with this unprecedented bullish sentiment among recognizable institutions. Compared to forecasts of over 7000 points, predictions from major Wall Street financial giants like Morgan Stanley, Goldman Sachs Group, Inc., and J.P. Morgan appear more conservative, with all three predicting the S&P 500 Index will be at 6500 points by 2025. In contrast, Oppenheimer and a few other Wall Street institutions, including Wells Fargo & Company, Deutsche Bank Aktiengesellschaft, and Yardeni Research, predict that the S&P 500 Index will break through the significant milestone of 7000 points by the end of next year for the first time in US stock market history. Oppenheimer's Chief Market Strategist John Stoltzfus is currently the most optimistic star strategist on Wall Street for 2025 forecast of the US benchmark index. He raised the target point of the S&P 500 Index to 6200 points in November for 2024. However, these Wall Street institutions mentioned in the research report that although the overall trend is expected to continue rising next year, the S&P 500 Index may still experience a period of around 10% correction and relatively short-term consolidation. This phase often presents opportunities for the "buy on dips" strategy to be effective, which is the core logic behind Oppenheimer's bullish view on the SPDR Capital Markets ETF and its recommendation for investors to actively "buy on dips." The SPDR Capital Markets ETF aims to track the market performance of the "Standard Pool Corporation Capital Markets Select Industry Index." The index represents the "capital markets portion" of the S&P Total Market Index (TMI), focusing on financial stocks, covering asset management firms and custodial banks, diversified capital markets, financial market exchanges, as well as investment banks and brokerage firms. The SPDR Capital Markets ETF provides US stock investors with broad exposure to the US capital markets sector, including large, mid, and small financial stocks. Its core holdings include Coinbase (COIN.US), RobinHood (HOOD.US), LPL Financial (LPLA.US), Interactive Brokers Group, Inc. Class A (IBKR.US), and Blue Owl Capital (OWL.US) among others. Regarding industry investment outlook for 2025, Wall Street is generally positive on financial stocks, with not only Oppenheimer, but also Bank of America Corp, Bank of Montreal, J.P. Morgan, and Wells Fargo & Company, among other well-known Wall Street institutions expressing optimism for financial stocks. These institutions state that the catalysts driving bank stock growth are clear: strong economy, expectations of loosened regulations under President Trump, attractive valuations, and low interest rates. Jake Manoukian, Private Bank's US Investment Strategy Director at J.P. Morgan, said that his investment team is looking for opportunities in the financial and asset management industries for the 2025 portfolio. "It is clear that this administration will be more friendly to Wall Street and trading activities. This enthusiasm is not without precedent. Financial stocks have long been seen as Republican government favorites."During the term of office, the preferred industry is mainly due to the relaxation of regulations and expectations of creating a more favorable environment for major financial giants and large-scale merger transactions." stated the Morgan J.P. team led by Manoukian.In addition, the following are the stocks in the S&P Capital Markets ETF constituents that the Oppenheimer analysis team has given a "buy" recommendation for and have the potential for excess returns: Coinbase Global (COIN) - The stock is consolidating after a breakout. Moody's Corporation (MCO) - Its bullish consolidation is moving upward. Blue Owl Capital (OWL) - The stock is "continuing to move up" after a breakout. StepStone Group, Inc. (STEP) - The stock has seen a tactical pullback, providing a buying opportunity on dips.