Are you looking to capitalize on the potential rally in materials stocks? Well, you’re in luck because a major Wall Street strategist is jumping aboard this story and predicting big things for this sector. Savita Subramanian from Bank of America recently upgraded the materials group to overweight from market weight, citing the high correlation to Chinese equities and the potential benefits from economic stimulus measures in China.
This theory was evident during last week’s rally for Chinese stocks, with the Materials Select Sector SPDR Fund (XLB) rising by 3%. While there was a slight dip on Monday and Tuesday, the overall trend is optimistic. The top holdings of XLB include Linde, Sherwin-Williams, and Freeport-McMoRan.
At Extreme Investor Network, our experts see the materials group as a lucrative opportunity, especially with the Federal Reserve’s accommodative monetary policy and lower interest rates. Bank of America’s Subramanian noted that materials saw the biggest earnings swoon since the hiking began, suggesting significant potential upside in earnings with an accelerating profits cycle amid Fed cuts.
But Bank of America isn’t the only one bullish on materials. Roth MKM’s JC O’Hara also highlighted the group earlier in the week, indicating a positive sentiment among Wall Street analysts.
If you’re looking to ride the wave of a potential rally in materials stocks, stay tuned to Extreme Investor Network for more expert insights and analysis to help you make informed investment decisions.