Bank of America Corp. economist provides encouraging outlook on the U.S. economy.

Economist Savita Subramanian of Bank of America Corp. has provided an encouraging outlook on the current situation of the U.S. economy, highlighting that the probability of a recession or stagflation is only 10% or less. Despite some analysts' concerns about a possible slowdown due to prolonged high interest rates, Subramanian maintains that the economy shows signs of strength that will continue to favor stocks in the U.S. market. While there has been a softening in some economic indicators, such as the labor market, manufacturing, and retail sales, Subramanian points out that most of these indicators are normalizing from exceptionally high levels, which does not indicate an imminent slowdown, according to her statements to Bloomberg Television. The Bank of America expert emphasizes the importance of maintaining an optimistic perspective amidst concerns that have arisen from events such as the COVID-19 pandemic and the global financial crisis. Subramanian highlights that investors often focus on the negatives, but she believes the current situation is encouraging and it is important not to be swayed by unwarranted pessimism. Subramanian's optimism is supported by the positive behavior of the markets, which continued to rise after a report showed a smaller-than-expected increase in consumer prices in May. This strengthened expectations of a possible interest rate cut by the Federal Reserve for the remainder of the year, pushing up the S&P 500 and the Nasdaq 100. Regarding Bank of America's projections for the S&P 500, Subramanian has reiterated that the year-end target is 5,400, just below the current level. While maintaining a constructive view on U.S. equities, the expert points out that extremely negative expectations are no longer as influential as they were in the past, and the recommendation to allocate funds to stocks has reached a two-year high. Subramanian has also emphasized the importance of considering active strategies in a context where the S&P 500 has reached historic levels, recommending clients to opt for large-cap companies, cyclical stocks, and dividends. In this sense, Bank of America's forecasts for the benchmark index in 2024 do not imply significant increases, but confidence in the value of these companies remains strong. Overall, Savita Subramanian and her team at Bank of America have an optimistic view of the U.S. economic and stock market outlook, highlighting the strength of the economy and the opportunities in the stock market. While some uncertainties persist, the expert insists on the importance of maintaining a balanced perspective and not succumbing to unwarranted pessimism in a time of economic recovery and expansion.