LIVE MARKETS-A new era for industrials?

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A NEW ERA FOR INDUSTRIALS?

Investors have favored big tech stocks and high-quality bonds for years, but these assets have become expensive. Going forward, Bank of America sees better opportunities elsewhere – within an industrial renaissance.

Analysts led by Jared Woodard say there are signs of a new U.S. industrial era, supported by strong manufacturing data and potential banking deregulation that could unlock over $1 trillion in new lending.

Bank of America's indicators show industrial momentum at its best levels since 2021, with tight truck capacity and rising demand.

The main barrier has been restrictive credit conditions, but reforms could ease this. The data suggests GDP growth could reach 3-4%, above expectations.

Similar strength appears globally, with Korean exports pointing to strong worldwide earnings growth.

To take advantage of this shift, Bank of America recommends investors look to small- and mid-cap stocks in industrials, materials, banks and defense. Foreign stocks with deep capital markets are also attractive, particularly in Asia, along with real assets and commodities.

These areas remain underinvested, but are now leading returns in 2025 as the economic environment changes.

(Karen Brettell)

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