Bank of America’s equity strategist Savita Subramanian believes the S&P 500 can continue its rally despite being historically pricey. The index is expensive by nearly every metric, including a forward price-to-earnings ratio of 22.1 and an enterprise value-to-sales ratio of 3.36. However, deregulation under the Trump administration could provide a boost to certain sectors, such as consumer goods, commodities, financials, and transports.
Subramanian notes that industries heavily regulated by government are typically more expensive than their unregulated peers. She highlights areas like Staples, SMID Health Care, and other fragmented sectors that could benefit from lighter regulation. The financials sector has been off to a solid start in 2025 but faces pressure on Thursday after a strong start.
While deregulation is a priority for President Trump and his administration, the exact extent of those changes remains unclear. The Securities and Exchange Commission appears more open to cryptocurrency under Trump, while the Federal Trade Commission and Department of Justice have maintained Biden-era rules for reviewing corporate mergers.
Source: https://www.cnbc.com/2025/02/20/bank-of-america-says-the-sp-500-still-has-one-way-to-move-higher.html