Chart of the Week: Strong forecasts, weak conviction

Published On Nov 16, 2024, 7:46 AM

Following Donald Trump's recent election win, the stock market showed initial gains but has significantly retreated since then. Economists at Bank of America noted a substantial level of uncertainty surrounding future policies and their potential impacts on economic growth, which they forecasted at 2% for 2025. However, they stressed their low confidence in this prediction, indicating scenarios where growth could exceed 3% or potentially lead to a recession. The markets are reacting variably to news about Trump's cabinet picks, reflecting this uncertainty about whether his economic promises will be realized.

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Stock Forecasts

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Negative

The uncertainty around Trump's policies could lead to volatility in the stock market, particularly for sectors that are sensitive to government decisions. Investors might see opportunities in defensive stocks and sectors that could benefit from pro-growth policies if they materialize.

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