What could go wrong with Wall Street's 2025 consensus: Morning Brief

Published On Dec 17, 2024, 6:00 AM

Wall Street is currently optimistic about the U.S. stock market's performance in 2025, driven by anticipated strong economic growth and new policies from the incoming Trump administration. However, there are concerns about inflation, the potential for higher interest rates, and the ramifications of immigration policies on the labor market, which could negatively impact the economic growth forecast. Strategists suggest that alternative markets, particularly in Europe, could present investment opportunities if the U.S. market does not meet bullish expectations.

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Stock Forecasts

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Neutral

Given the mixed signals regarding U.S. economic performance and inflation risks, the outlook for U.S. stocks could remain uncertain, potentially leading to fluctuations rather than a clear upward trajectory. This environment might benefit more diversified investment strategies or those focused on undervalued markets.

IEVView IEV chart on TradingView

Positive

With European markets being highlighted as potentially undervalued and attractive if geopolitical tensions ease and tariffs are reduced, there may be a shift towards these markets. Investment in European ETFs could yield better results than U.S. equities in a stagnated growth scenario.

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