The head of US Equity Strategy at Bank of America Securities says broad market gains will be difficult to sustain from current levels.
Appearing on CNBC’s Power Lunch, Savita Subramanian says BofA holds a 7,100 year-end price target for the S&P 500 and remains bearish at the index level.
She says the best single-index buy today is the Russell Large Cap Value Index, pointing to its income-generating profile. Within the broader market, she sees opportunity in value and cyclical names but warns the tailwinds that drove last year’s gains have largely faded.
Subramanian note that 2025 was “essentially the best year on record when it comes to liquidity,” with individual investors, corporate buybacks, privatizations, and government entities all buying U.S. equities simultaneously. That dynamic, she says, is not repeating in 2026.
According to Subramanian:
“The good news is priced in. Typically years where you’ve got great earnings growth and GDP growth are not the best years for equity returns. We are getting a big shift in supply demand. So that’s why we’re bearish at an index level. Within the index, I think there’s a tremendous opportunity to own income value areas of the market that are throwing off capital rather than using it.”
Subramanian also questions how much more earnings can surprise, noting analysts are now forecasting near-record long-term earnings growth rates with strong earnings already anticipated.
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