The US economy closed the 4th quarter of 2024 with a growth of +2.3% annualized, lower than expectations ( +2.6%), which reflects the resilience of the activity despite the high level in the interest rate reference in much of the year. However, the arrival of Donald Trump To the Presidency adds uncertainty regarding the evolution of key macroeconomic variables: inflation, growth and unemployment.
For this year, it is expected that the Federal Reserve (Fed) The reference rate cycle continues at a more gradual pace, which is in the range of 4.25%-4.50%, given the expectation of a higher inflation level to the expected. In turn, a slowdown in economic growth is expected, which would be around +2.1% according to the entity.
At the global level, it is projected that the activity expands around +3.3%, similar to 2024. However, China would moderate the expansion rate ( +4.5%) and the eurozone would exhibit a slight improvement against 2024 (+1.1%).
In another order, the FED and the European Central Bank (ECB) have made its monetary policies flexible during 2024. While inflation levels are higher than the 2% medium -term objective, the perspective is that the soften of politics continues monetary.
Thus, the ECB would advance faster, with a rate at the end of the year at 2.15%, while the Fed would make it slower, with a rate at 4%-4.25%.
Actions market
The forecasts for the sharing market account for a positive potential performance for the United States in 2025, but more modest and limited to 1 high digit.
Companies would continue to increase their profits this year. According to the FACTSET agency, increases in profits per share of +13% in 2025 and +5.5% in terms of income are expected. The price/profits ratio per share for the next 12 months of the S&P 500 is located 22.1 times, exceeding historical averages.
In this environment, and with the expectation of a deceleration in the growth of the US, it looks convenient to prioritize sectors such as energy, technology, industrial and financial.
Bond market
The perspective of highly down but high interest rates in historical terms this year maintains the attractiveness of fixed income, due to considerably higher yields than in the average of the last 20 years (5.5% average for high quality bonds vs 4% historical).
It looks convenient to “ensure” higher yields today compared to the levels they may have in the coming years as the monetary authority makes such cuts. The probability discounted by the market shows one (1) cut of a quarter percentage point in the Fed rate by 2025 (which would locate it in a range of 4.0%-4.25%), a less optimistic vision of the officer (2 cuts up to a range of 3.75%- 4%).
With the normalized yield curve, the reduction in the interest rate in principle is positive for bond prices, although it depends on their term. In this scenario, the short stretch of the yield curve for conservative profiles, and the medium for moderate, looks appropriate. The strategy of ensuring a high level of performance in medium -term quality bonds (maintaining an investment horizon similar to the bonus term) is convenient. It should be noted that those with long maturities are less attractive in this context.
Commodities
The expectation is that the dollar stay strong in the year (would be $ 1.05 per euro, similar to 2024) product of an interest rate in the US at high levels and a reference rate in low euros, which would generate some pressure on the prices of the prices of raw materials
It is expected that the demand remains stable – in the absence of recession -, although it could manifest a certain weakness, mainly on the side of China. Meanwhile, The offer will be determined by the expectation that there are no substantial changes in the geopolitical front and the favorable climatic perspectives.
He Brent oil It would quote around USD 74 the barrel, in front of production cuts from the organization of oil export countries (OPEC+) and higher incentives to the US offer, according to the Energy Information Administration (EIA).
On the other hand, the US Department of Agriculture (USDA) predicts good campaigns 2024/2025 of soy, wheat and cornwhich would reach 424 million tons (MT), 794 MT and 1.212 MT, respectively.
Alternative investments
The expectation that the Fed continues to cut at a gradual rhythm the reference rate this year would generate a certain “relief” in the financing costs in private capital activities (“Private Equity”), which would result in a gradual rebound of quantity of the quantity of transactions. It looks convenient to prioritize investments in companies of high income and unpaid businesses.
On the other side of the same currency, it is convenient for the segment of Private credit To continue registering high levels in the reference interest rate, since it allows obtaining yields greater than 10%.
Finally, in Real Estate “caution” predominates since high financing costs make it difficult to buy housing. The high mortgage rates (current 7%) would put a stop at the assessment of these assets.
Bridge CEO.
Source: Ambito
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