One bank sees the S&P 500 hitting 8,000 in 2026, breaking down the bitcoin-stock market divergence

Cryptocurrency Market - Bitcoin has fallen below $90,000, down about 3% in the last 24 hours and 5% year-to-date, marking a significant divergence from traditional stock movements for the first time in a decade [1][2][3] - Bitcoin is currently down approximately 30% from its all-time high of over $126,000 reached in October [3] - The momentum in the metals market, particularly gold and silver, is drawing investors away from Bitcoin, with gold up nearly 60% year-to-date and silver up almost 100% [5][6] S&P 500 Outlook - Deutsche Bank projects the S&P 500 to reach 8,000 by the end of 2026, driven by strong earnings growth expected to be around 14% next year [7][13] - The growth is anticipated to broaden across multiple sectors, with signs of improvement already noted in the third quarter [10][11] - Current investor positioning is not aligned with the expected growth, suggesting potential for increased exposure to equities [12][13] Sector Analysis - Financials are favored due to expected loan growth and increased capital issuance, which are not yet fully priced into stocks [23] - Industrials are also seen positively, benefiting from secular themes in power demand and manufacturing [24] - Healthcare is expected to recover from previous policy headwinds, with potential for significant upside as the market stabilizes [25][26] Tesla's Market Position - Tesla is expanding its lower-cost vehicle lineup in Europe to address sales pressure, with new standard models priced significantly lower than premium versions [29][31] - Increased competition from other EV manufacturers in Europe, including established brands and Chinese automakers, is impacting Tesla's market share [33] - Price adjustments and potential advancements in features like Full Self-Driving (FSD) may help Tesla regain traction in the European market [35] Federal Reserve and Economic Indicators - The Federal Reserve is expected to cut rates by 25 basis points in December, with a long pause anticipated into next year [36][19] - Strong demand for AI cloud services is expected to drive Oracle's growth, with projections of a 70% increase in cloud infrastructure business this quarter [38] - The NFIB optimism index for small businesses is forecasted to hold steady, indicating a cautious outlook among small business owners [39]