Inversely The first quote of the year 2025 left the three reference indices in the redthe Dow Jones Industrial Average fell 0.4% to 42,392.27 points; The S&P500 lost 0.2% to 5,868.55 points and the Nasdaq Composite depreciated 0.2% to 19,280.79 points.
Trump policy and Fed rate cuts will be focus in 2025
Trump’s economic and international policies will be the main focus in the coming month, when he takes office on January 20. The US president-elect has promised to implement largely expansionary policies, but he has also promised strong trade tariffs against the United States’ main trading partners, such as China, Canada and Mexico.
Uncertainty over Trump’s policies has made investors cautious in recent weeks, prompting a some profit taking after an initial rally on Wall Street in response to Trump’s election victory in early November.
Traders also fear that Trump’s policies could keep inflation high in the long term, inviting fewer rate cuts The central bank recently signaled a slower pace of rate cuts in 2025, citing concerns about sticky inflation and a strong labor market.
What happened to some of the stocks in the first Wall Street round of the year?
The Tesla shares fell more than 6% at the opening after the electric vehicle maker reported record fourth-quarter vehicle deliveries, the company said Thursday. However, deliveries were below consensus expectations, as its deliveries for the quarter were 495,570, below the estimate of 512,277. The firm also produced approximately 459,000 vehicles during the quarter.
Apple suffered a 2.8% lossamid its policy of offering deals for the latest iPhone models in China, a rare move that points to growing competition from domestic rivals in the world’s largest smartphone market.
The apple company is dealing with the declining market share in the important Chinese marketwith competition from local manufacturers becoming more intense.
Among the winning stocks of the day were Kosmos Energy (+6.9%), Meta (+1.5%) and Dash (+1.4%). On the contrary, Among the losers, Boeing (-3.3%), Palantir (-2.2%) and BIIB (-1.5%) stood out..
Crude rose due to Chinese optimism
Crude oil prices rose on Thursdayhelped by declining oil inventories in the United States, while traders cautiously watched an economic recovery in China, the world’s largest importer.
The US crude oil (WTI) futures rose 2.6% to $73.63 a barrelwhile the contract Brent rose 2.3% to $76.39.
Chinese President Xi Jinping said in his New Year’s speech on Tuesday that the country would implement more proactive policies to promote growth in 2025. China’s factory activity grew in December, according to the Caixin/S&P Global private sector survey on Thursday, but at a slower pace than expected. This echoed Tuesday’s official survey and suggested that policy stimulus is gradually reaching the world’s second-largest economy.
In parallel, the American Petroleum Institute reported on Tuesday that the US oil inventories fell by 1.4 million barrels last week.
Official data from the Energy Information Administration will be released later on Thursday, and A drop in US oil inventories tends to indicate an increase in demand of crude oil.
Goldman Sachs economists list 10 key questions for 2025
The economists of Goldman Sachs They clarified ten critical questions that shape the outlook for the US economy in 2025 in a note on Monday and are reported by Reuters.
The company forecasts GDP growth of 2.4% by 2025exceeding the consensus of 2%. They attribute this to strong private domestic demand and business investment supported by artificial intelligence and federal incentives like the Inflation Reduction Act.
Regarding consumer spending, it is expected to increase by 2.3%driven by strong real income gains, a strong labor market, and wealth effects from rising stock markets.
Goldman does not believe the labor market will weaken. The unemployment rate is expected to drop slightly to 4% by the end of 2025. The Investment Bank thinks that strong demand growth and a slowdown in the supply of immigrant labor will contribute to this stability.
The report also anticipates that the PCE core inflation will fall to 2.1% by the end of the year, barring tariff impacts, as wage pressures ease and catch-up inflation subsides.
As for the ratespredicts three cuts at a quarterly pace or every other meeting in March, June and September 2025. This moderate stance reflects the bank’s confidence in declining inflation and the moderate impacts of potential tariff policies.
Economists at Goldman Sachs anticipate that the Fed will increase its estimate of neutral rate median at 3.25% or more, reflecting broader demand influences.
Besides, They do not believe Trump will take an aggressive stance against Fed Chairman Jerome Powell. They said their impression “is that the White House concluded during Trump’s first term that it cannot remove the president because the law only allows it for good cause, and it is unlikely that the courts will agree that failing to comply with the rate cuts meets this standard.
Goldman predicts that immigration net decline to 750,000 a year, in line with the Trump administration’s stricter policies, and duty higher for Chinese imports, but without a scenario of universal tariffs, due to the economic and political risks.
Lastly, the deficit reduction They see it as unlikely, with tax cuts and defense spending offsetting fiscal constraints. “We also expect federal spending growth to increase somewhat, particularly on defense. A modest increase in tariff revenues, as noted above, would partially offset these changes,” they concluded.
Source: Ambito
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