Banking giant Wells Fargo is reportedly naming its most favored stock market sector while reducing its exposure to the healthcare and communication services industries.
According to a new article on Investing.com, Wells Fargo is shifting away from the aforementioned industries and moving toward industrials, financials, and utilities, referring to the financial sector as its “most favored,” though no specific securities were named.
In a recent note, the bank said the impact of President Donald Trump’s tariffs was less than what was predicted and that the labor market is holding up better than expected.
As stated by Wells Fargo, according to Investing.com,
“The consensus economic growth estimates for the U.S. in the quarters and year ahead have been moving higher in recent weeks.”
The financial services titan’s readjusted numbers have the US economy growing by 2% this year, up from its previous prediction of 1.3%. In 2026, the bank envisions 2.4% growth, up from 1.5% while earnings estimates for the S&P 500 have also been raised.
According to the article, Wells Fargo believes in the financial sector because “should benefit from a steeper yield curve, regulatory reforms, and more mergers and acquisitions,” while utilities are poised to boom from “the capital-expenditure boom directed at artificial intelligence as demand for electricity surges.”
In contrast, the banking giant now views the healthcare and communication services industries as neutral and unfavorable, respectively.
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