Five key factors analysts think could shape the markets in 2025
Global equities reached record highs in 2024, mainly due to generative artificial intelligence and the global economic recovery.
Building on the positive economic backdrop in 2024, the global economy is expected to keep growing and stocks are expected to keep riding the wave in the new year, according to analysts.
UK-based investment management company Brooks Macdonald states that easing inflation pressures and decreasing interest rates are expected to drive market performance.
In the US, markets could also be fuelled by "extension (and possible enhancement) of tax cuts in 2025", said Chris Crawford, managing partner at Crawford Fund Management.
Another wealth manager, AJ Bell, also foresees good results on the stock markets, especially in "Big Tech", if investors choose "the right approach".
AJ Bell investment director Russ Mould warned that the rules of the market are changing, thanks to AI, and said that "investors need to consider the words of American industrialist J. Paul Getty, who once asserted that 'in times of rapid change, experience can be your worst enemy', because those who are sticking to long-held valuation disciplines are getting left behind as US equities generally, AI-related names more specifically and cryptocurrencies are all on a roll."
Mould said he expects this trend to continue as long as the cooler inflation, steady growth and lower interest rates develop as hoped.
Chris Crawford added that Bitcoin's recent rally is not over. "The increasing mainstream adoption of Bitcoin is another interesting narrative that we expect in the new year as financial advisors and institutions integrate Bitcoin into their portfolios."
However, he noted that markets need to be aware of the risks, including debt, tariffs
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