Wells Fargo(US:WFC) Ge Long Hui A P P·2025-11-12 06:45Core Viewpoint - Wells Fargo raised its S&P 500 index target for the end of 2025 to 7100 points, citing a reverse buy signal in the market and an improving liquidity environment [1] Group 1: Market Indicators - The sentiment indicator dropped to -0.99, close to the historical buy signal threshold of -1.00 [1] - Historically, after similar buy signals, the S&P 500 has averaged a 7.5% increase over the following three months, with positive returns occurring 9 out of 10 times [1] Group 2: Counterarguments to Bearish Views - Concerns about tight liquidity are being refuted, as short-term financing rates have normalized, and the Treasury General Account (TGA) balance is at its highest since the pandemic, with quantitative tightening nearing an end [1] - Despite rising discussions on layoffs and weak consumer spending, government reopening and potential rate cuts in December are expected to support risk appetite [1] - A 10% market pullback is considered normal, occurring on average once a year since 1950 [1] - Concerns over overheating in AI-related capital expenditures are addressed, with large cloud computing companies' spending seen as necessary for maintaining competitiveness, benefiting AI infrastructure stocks [1] - While acknowledging that current price-to-earnings ratios are high, it is emphasized that valuation is only half of the equation, with earnings surprises being the other half [1] Group 3: Earnings Growth Projections - If corporate earnings grow by at least 10% annually from 2025 to 2027, the S&P 500 is expected to deliver an average total return of about 8% per year over the next five years, potentially reaching 9500 points by 2030 [2]