Even as rising interest rates put pressure on equities, there are still good reasons to be excited about US stocks now, according to Mike Washington, equities sales trader with Goldman Sachs Global Banking & Markets.
“There has been a material move higher in yields,” Washington says, “and it is true that when rates rise at this velocity, equities have tended to underperform over the next month.”
But he adds that “there’s a lot in the market’s favor in 2025.”
Washington says the rise of AI could start to benefit a wide range of companies. He also notes that companies could be a powerful source of demand for equities. Corporate repurchase authorizations rose to nearly a record high in 2024, which means that companies have the green light to buy back a significant amount of their own shares this year.
Finally, he says that while investor sentiment may have been “stretched” in December, it “has really come off the highs.”
“I think when it’s all said and done,” Washington concludes, “we’re looking at another double-digit-return year.”
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