In a market landscape, which is still fixed on fears of stagffalia and modest recovery, Bank of America sounds a counter -aar – and categorically bulls.
According to the new note by BOFA Research analysts, the next phase of the US economy and shares may not be a routine recovery, but an outspoken boom.
“Today, the merger of the factors claims that the key risk of a queue, which may not be priced, is not just a cyclical recovery, but a boom,” they said.
BOFA analysts quoted five pillars supporting this more bite.
First is political will, arguing that with the intermediate elections in the United States a few fourth distance, politicians have a strong incentive for short -term growth initiatives.
Second is the Washington Bill Law (OBBBA) aimed at domestic production.
Third is the massive collection of overseas costs, with Germany recently adopted the largest stimulation package in EU history, while global reflection is built elsewhere.
Fourth, BOFA is widely expanded to capital expenditures, with hyperskalers such as Amazon, Meta, Microsoft and the alphabet has been set for nearly $ 700 billion in capital expenditures between 2025 and 2026. In addition, more non -US companies are planning to expand production capacity.
Fifth, BOFA cites its own “regime indicator”, a mix of macro signals, including corporate revisions for profit per share, GDP forecasts and other emerging signals. This is on the verge of flipping from a “decline” to “recovery” – a change that historically heralds a rally in stocks.
The dominant story in this indicator remains conservative, according to the BOFA team, led by Savita Submanian. In June, 70% of fund managers still predicted Stagflation, with only 10% planning a “boom” of altitude growth and inflation. Still, Bofa claims, the catalyst for the top is real and forthcoming. If the regime indicator really turns to “recovery” in early August, the historic precedent suggests that it is likely to be a quick rotation.
So, how healthy do these five factors look?
The best economies have already promised a massive incentive. In March, China presented plans for the issuance of $ 1.3 trillion ($ 179 billion) in special bonds of the Ministry of Finance, plus 4.4 trillion yuan from special power bonds for local government.
Meanwhile, much of the EU stimulus still resulting from the higher NEXTGEENATIONEU package is worth up to 806.9 billion euros (about $ 880 billion) by 2026. Large European economies have complemented this with additional investments, and in some cases are targeting fiscal expansion.