Well, butter my biscuit and call me a pessimist, but the head of US Equity Strategy at the grand ol’ Bank of America Securities has decided to rain on our parade. According to Savita Subramanian, the days of broad market gains are about as likely as a dragon taking up knitting. Apparently, the current levels are as sustainable as a chocolate teapot.
On the ever-so-serious CNBC’s Power Lunch (where they serve cold hard truths with a side of charts), Subramanian declared that BofA is sticking to its 7,100 year-end price target for the S&P 500. That’s right, folks, the bear is still growling at the index level. But fear not, for she’s got a hot tip: the Russell Large Cap Value Index is the belle of the ball, thanks to its income-generating charm. Cyclical names and value stocks? They’re the wallflowers worth asking to dance, though the tailwinds from last year’s party have all but vanished.
Subramanian reminisced about 2025, calling it “essentially the best year on record when it comes to liquidity.” Oh, the good old days when individual investors, corporate buybacks, privatizations, and even the government were all throwing money at U.S. equities like it was going out of fashion. Alas, 2026 is looking more like a sobering morning after, with no repeat of that wild dynamic.
In her own words, with a dash of Pratchett-esque wit:
“The good news is priced in, much like the last slice of pie at a feast-everyone’s already had their fill. Years of great earnings growth and GDP growth are like a wizard’s promise: impressive but not always reliable. We’re seeing a big shift in supply and demand, which is why we’re as bearish as a troll at a poetry reading. But fear not, within the index, there’s treasure to be found in the income value areas-those that throw off capital like a dwarf throws axes.”
And let’s not forget the analysts, those poor souls forecasting near-record long-term earnings growth rates. Subramanian wonders how much more earnings can surprise, given that strong earnings are already as expected as a watchman’s nap in Ankh-Morpork. Still, she’s got her eye on the prize, or at least the crumbs left on the table.
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2026-06-16 16:21