Bank of East Asia: Expected good performance of US stocks in the first quarter of 2025, with the S&P 500 reaching a high of 6335 points.

The Chief Investment Strategist of Bank of East Asia, Li Zhenhao, stated that for the first quarter of 2025, under the expectation of the "Red Tide" and "America First" policies, the performance of US stocks is expected to outperform other regions. Based on past US stock earnings and recent P/E ratios, the volatility range for the S&P 500 index this quarter is estimated to be between 6178 and 6335 points. Comprehensive analysis suggests that the healthcare, non-essential goods, technology, materials, and industrial sectors in the US stock market are expected to perform well. Additionally, he mentioned that the bottom of the risk prediction range is around 5420 points, which is lower than the level above 6000 points, indicating a potential downside of nearly 10%. This implies that the index may experience an upward trend after a correction, and investors should pay attention to risk management. Li Zhenhao also mentioned that the expectation of global multipolarity will lead to various international frictions. The Trump-style "America First" approach is pushing away allies, and the EU and the UK could potentially be caught in the crossfire of tariffs imposed by both the US and China. China is also preparing for this, and trade relations among all parties are likely to be reshuffled. He continued to point out that Trump's return to the White House is expected to support corporate bonds and emerging US dollar bond markets, with interest rate changes benefiting corporate bonds. Following Trump's inauguration, the risk in the European bond market is expected to rise, but Asia offers attractive options. The predicted range for the 10-year yield is between 4.25% and 4.36%, while the 2-year range is between 3.67% and 3.98%.