Reuters
FILE PHOTO: Traders work on the floor at the NYSE in New York
- Bank of America analysts project a "risk asset melt-up" in the first quarter of 2020 as global market risks fade away.
- The UK's general election and the "phase one" trade deal between the US and China remove key sources of market uncertainty heading into the new year, the analysts wrote.
- Continued liquidity injections from the Federal Reserve and European Central Bank also support a global run-up in the first quarter, the bank added.
- The analysts predict the S&P 500 will hit 3,333 by March 3, implying a 5.2% jump from Friday's close.
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Several events from recent weeks are set to drive the stock market higher through the first quarter of 2020, Bank of America said.
The analysts project the market to jump more than 5% by March in a "risk asset melt-up." The UK's general election and a "phase one" deal between the US and China eliminate much of the trade uncertainty plaguing investments through 2019. Central banks are also positioned to prop up markets through capital injections, the analysts added.
Returns in the new year will be "front-loaded," BofA said, citing a 3,333 target for the S&P 500 index by March 3. The analysts also see the 10-year Treasury yield hitting 2.2% by February 2.
The targets imply a 5.2% jump for the stock index from Friday's close, and a 36-basis-point rise for the Treasury bond.
Here are the three drivers for the first-quarter bull run, according to BofA.
Get the latest Bank of America stock price here.