The economic uncertainty and latent risks identified by Nomura underscore the need for investors to adopt a prudent strategy in the face of low-risk, high-impact scenarios that could shake the markets in 2025.
By definition, anticipating black swans—completely unforeseen events that generate a strong impact on the markets — is impossible. However, analysts Nomura They prefer to focus on what they call gray swans, which are “low probability, high impact events that few anticipate”.
Nomura It is one of the most important financial institutions in Japan and one of the main ones globally. Founded in 1925, Nomura Holdings is a financial group that offers a wide range of services, including investment banking, securities brokerage, asset management and financial advisory.
Gareth Nicholsonan analyst at the Japanese bank, mentions among these possible scenarios an eventual stock market crash. Nvidia. This could happen if the launches of their new chips for artificial intelligence are delayed or if technology companies reduce their investment rate.
If this is the case, he warns, “the high concentration in the US market would imply a sharp correction of the stock market”. Currently, Nvidia has a market capitalization of $3.4 trillion, which magnifies its weight in the indices. It should be remembered that these days it falls close to 10%, after several sessions of bad streak.
Another gray swan that could manifest itself in 2025 is the abrupt end of the “Japanese carry tradea practice that consists of taking out debt in yen to invest in higher-yielding assets in other markets. The risk had already been hinted at last summer and, if Japan decides to raise its interest ratesNomura points out that “a massive risk aversion movement would occur,” negatively impacting investors.
US debt appears on Nomura’s radar
The third critical scenario includes the 10-year US debt yield exceeding 6%, a considerable jump from the current level of 4.2%. The consequences would be severe for both the bond and stock markets. Some analysts warn that this possibility gains strength if a possible presidency of Donald Trump triggers the fiscal deficit.
nvidia
Reuters
The other three risks that Nomura lists are linked to the global macroeconomic and geopolitical context. In first placea drop in consumption in the United States that stops its economic growth. In second placean escalation of international tensions with the emergence of new conflicts, which would add to the current crises in Ukraine and the Middle East. Finallythe failure of the Chinese government’s stimulus measures to revitalize the economy of the Asian giant, which would prolong the weakness of its activity.
Faced with these scenarios, how can investors protect themselves? The general recommendation aims to reduce exposure to the Stock Market. However, the market seems to assign slim probabilities to these gray swans finally materializing.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
