Author Topic: Your market predictions for 2025  (Read 5341 times)

CountToFI

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Your market predictions for 2025
« on: January 02, 2025, 07:38:34 PM »
I always find this topic an enjoyable read and haven't seen one for this year.

Seems like we're headed for some interesting economics times, particularly with some of the economic/political proposals including tariffs, taxation overhauls, government input on Fed decisions, and the estimated federal deficit.

I'll admit I have a pretty shallow understanding of macroeconomics but here's a few guesses

- Initial rise in the stock market followed by a fairly aggressive drop late this year, SP500 ending down 5-10%.
- Inflation rises initially, but subsides to current levels (+/- 0.5%) as prices of goods puts stress on households and leads to a recession around Q4
- Housing market remains relatively unchanged nationally
- Fed rate drops 25-50 bps late in the year

- For some extra fun: bitcoin will reach 200,000 before aggressively dropping late in the year with "the recession" ending around 75,000 (I'd be interested to see how crypto responds to a recession/market like that seen in the dot-com crisis or the GFC)

With all that said, I'll be approaching this year the same as every other and continue to invest steadily into the market

EliteZags

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Re: Your market predictions for 2025
« Reply #1 on: January 02, 2025, 08:30:05 PM »
PLTR to the mooooooon

sol

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Re: Your market predictions for 2025
« Reply #2 on: January 03, 2025, 12:04:27 AM »
I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors.  

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?

ChpBstrd

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Re: Your market predictions for 2025
« Reply #3 on: January 03, 2025, 08:00:34 AM »
I always find this topic an enjoyable read and haven't seen one for this year
I posted one here in Off Topic about 2 hours before you posted yours :))

leevs11

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Re: Your market predictions for 2025
« Reply #4 on: January 03, 2025, 11:24:53 AM »
I think the market will go up some and then go down some. By the end of the year, it'll probably be up some. But maybe down some.

Oh and it could crash way down too.

CountToFI

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Re: Your market predictions for 2025
« Reply #5 on: January 03, 2025, 01:48:11 PM »
I always find this topic an enjoyable read and haven't seen one for this year
I posted one here in Off Topic about 2 hours before you posted yours :))


Ahh shoot, I'll go ahead and post my prediction over there!

ChpBstrd

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Re: Your market predictions for 2025
« Reply #6 on: January 03, 2025, 03:58:55 PM »
I always find this topic an enjoyable read and haven't seen one for this year
I posted one here in Off Topic about 2 hours before you posted yours :))
Ahh shoot, I'll go ahead and post my prediction over there!
Eh, separate threads might have their uses. This one is specific for investments whereas mine was an everything thread, including politics, culture, and international relations. It might be fun to pick investment strategies or stocks here, and make broader predictions over there.

41_swish

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Re: Your market predictions for 2025
« Reply #7 on: January 03, 2025, 04:07:55 PM »
It will go up and it will go down. How much? Nobody knows. Maybe God, but that's it.

pdxvandal

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Re: Your market predictions for 2025
« Reply #8 on: January 03, 2025, 07:25:43 PM »
Hey, Sol ... good to see you back on these forums! Thought you were somehow banned for whatever dumb reason, but I don't exactly recall. Anyway, I've always appreciated your contributions on MMM!

I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors. 

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?

41_swish

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Re: Your market predictions for 2025
« Reply #9 on: January 04, 2025, 11:32:36 PM »
I don't see another +20% for the American markets. That is the only thing I feel confident about. If I were a betting man, I would say the market returns its historical average of 10% before inflation adjustment.

AuspiciousEight

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Re: Your market predictions for 2025
« Reply #10 on: January 05, 2025, 03:46:17 AM »
I am guessing that median real income will be flat, and both stock market returns and inflation will be in the 2-3% range for the year. The shiller pe ratio is incredibly hight right now based on historical averages, and can't keep going up forever...(Or maybe it can? Who knows).

The government has made it pretty clear they are comfortable printing money and handing out free money to avoid recessions, even if it leads to high inflation, and I think this will be the path moving forward if we hit any economic turbulence. So it's probably best to stay invested in stocks or real estate or some sort other semi inflation protected asset.

I am also assuming I will be wrong, because how high investors and the government chooses to prop up the stock market and economy is anyone's guess. Like seriously - who knows.

franklin4

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Re: Your market predictions for 2025
« Reply #11 on: January 06, 2025, 10:44:32 PM »
The government has made it pretty clear they are comfortable printing money and handing out free money to avoid recessions, even if it leads to high inflation, and I think this will be the path moving forward if we hit any economic turbulence. So it's probably best to stay invested in stocks or real estate or some sort other semi inflation protected asset.

This is an interesting observation because yes, the government fought off a covid recession with helicopter money. Will the republicans throw money around too if the economy gets shaky? Maybe to some degree, but causing high inflation is not a good way to stay in office, which is what politicians value more than anything. A pretty good argument could be made that excessive inflation at least contributed to the democrats to lose power although a recession could have had the same result. The helicopter money was nice for those who got it but do they remember that more than the much higher prices we have today that impact everyone? I doubt it. It seems unlikely that politicians will bring back high inflation. It's also unlikely that we will see a big drop in mortgage rates anytime soon. So my prediction is that housing prices will not shoot up.

Retire-Canada

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Re: Your market predictions for 2025
« Reply #12 on: January 07, 2025, 07:29:45 AM »
Predictions? The S&P 500 will deliver ~11% total return in 2025.

41_swish

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Re: Your market predictions for 2025
« Reply #13 on: January 07, 2025, 08:21:08 AM »
Predictions? The S&P 500 will deliver ~11% total return in 2025.
What about the TSX 100, buddy, eh?

Retire-Canada

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Re: Your market predictions for 2025
« Reply #14 on: January 07, 2025, 08:41:07 AM »
What about the TSX 100, buddy, eh?

You can fill in any prediction for me with that market's long-term average total return.


ChpBstrd

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Re: Your market predictions for 2025
« Reply #15 on: January 07, 2025, 01:19:48 PM »
According to Yardeni, (figure 7) analysts think the S&P500 will earn 243.31 in 2024 (up 10% from 221.36 in 2023). In 2025, earnings are expected to be 273.73, 12.5% higher than in 2024.

Margins, meanwhile, have been growing since 2023 and may approach 14% in 2025.

Operating earnings are expected to grow 14% (Yardeni, figure 10).

It would be erroneous to say stocks will simply rise with earnings, margins, or operating earnings, because two other big factors are involved: leverage and valuation. S&P500 companies on average ended 2024 with a debt/equity ratio of about 0.95, and a P/E ratio of 30.5.

Leverage increases the effect of rising earnings and rising margins on the value of equity, such that equity values can rise faster than earnings. This is how the S&P500 typically grows faster than its earnings. Valuation, on the other hand, has some very long-term mean reversion characteristics. Those mean-reverting pressures probably strengthen as we approach extreme levels, like a PE ratio of 30.5. So 2025 will be a tug of war between these fundamental forces, with growth*leverage pushing stocks up and valuation pushing down.

The chart says PE ratios above 30 have only been sustained for a few months at a time, historically. The PE sneaked above 30 for a few months in 1998-1999, again for almost a year in 2001-2002 during a recession, for almost a year in 2008-2009 (though this one was due to ttm earnings falling faster than stocks), and then for a few months between mid-2020 to early 2021 (due to earnings growth falling).

The relevant example would seem to be the late 1990s because that was a period of fast growth, no recession, and high valuations, among other similarities. All other examples of the S&P500 having a PE>30 occurred around recessions, when the trailing twelve months of earnings fell faster than the stock price. Investors price stocks based on the expectation of a return to growth in the future rather than the past, so they buy even when earnings are falling.

The 1998-1999 episode was resolved by high earnings growth, supporting a boom in prices of almost 30% in '98. Could the same occur in 2025, or did it already in 2024? If stock prices stayed the same, and earnings rose 14%, then the S&P500 would have a PE of 26.7 this time next year.

I think it could occur, and I think valuations are supported mostly by hope of fast earnings growth. That hope could be / will eventually be pierced if unemployment rises, or inflation rises.

I'm staying hedged to capture most of the upside and avoid most of the downside.

41_swish

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Re: Your market predictions for 2025
« Reply #16 on: January 13, 2025, 07:10:57 PM »
Is a PE ratio pointless these days for the Mega Cap tech stocks that drive most of the returns in the SP500?

ChpBstrd

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Re: Your market predictions for 2025
« Reply #17 on: January 13, 2025, 07:30:42 PM »
Is a PE ratio pointless these days for the Mega Cap tech stocks that drive most of the returns in the SP500?
I was in my early 20's during the dot-com implosion. The bubble was all over the news. My rationale is that my WMT stock would do fine because I wasn't in tech. I was absolutely wrong. WMT tanked because the high-PE tech stocks tanked.

https://yardeni.com/charts/stock-market-p-e-ratios/


41_swish

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Re: Your market predictions for 2025
« Reply #18 on: January 13, 2025, 07:45:43 PM »
Oh, this was just a little before my time.... But, this is very interesting... There will probably be a day of reckoning

Telecaster

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Re: Your market predictions for 2025
« Reply #19 on: January 13, 2025, 07:46:46 PM »
Is a PE ratio pointless these days for the Mega Cap tech stocks that drive most of the returns in the SP500?

It is still meaningful, but I don't know if it is actionable.   At least, I don't know how to act on it.   Valuations always matter.  It wasn't that long ago that AAPL and MSFT were P/E 10 or 11.   The gains since then have been eye-popping.   Now P/E's are in the 35 range, one would logically expect the price growth will be slower in the future.   That doesn't necessarily mean they are bad investments, but not as good as they were 10 or 15 years ago.   

Another meaningful metric is P/S.  The P/S for the S&P 500 is 3.1, compared with the average of 1.8.   Again, this appears to be predictive of lower future return rates, but I don't know how to act on that information.   

NorCal

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Re: Your market predictions for 2025
« Reply #20 on: January 13, 2025, 08:34:31 PM »
While I don't think it will happen, I think the markets are under-pricing a return of inflationary pressures, and related monetary tightening.  I'll call it a low-likehood, but high impact risk to both stock and bond prices.

I think manufacturers in particular are massively at risk from new tariffs, but manufacturing's share of the market is small enough that it won't matter much from a stock market standpoint. 

Edit to add that I think oil markets are at risk of moving into a state of oversupply, but that might take longer than 2025 to be felt.  I think sometime in the next few years we'll see a major dip in oil prices as China moves from a state of demand growth to demand decline, and OPEC struggles to enforce quotas.  This will be bad for oil stocks, but good for the rest of the economy. 
« Last Edit: January 13, 2025, 08:40:05 PM by NorCal »

ChpBstrd

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Re: Your market predictions for 2025
« Reply #21 on: January 13, 2025, 08:47:30 PM »
While I don't think it will happen, I think the markets are under-pricing a return of inflationary pressures, and related monetary tightening.  I'll call it a low-likehood, but high impact risk to both stock and bond prices.
I agree. I haven't seen inflation get better for the past 6 months. That means the neutral rate might be higher than today's federal funds rate, before last year's 100bp of cuts. Plus QT ends within the next few months. Plus some form of tariffs start this year.

I can easily imagine the Fed reversing course and raising rates or signaling rate hikes by the end of 2025. That would devastate the markets, just like it did in 2022.

I'd call it medium-likelihood, high-impact.

41_swish

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Re: Your market predictions for 2025
« Reply #22 on: January 13, 2025, 09:06:52 PM »
I have ZERO control over the market. So, is the only thing that I can do is stay the course and dollar cost average forever?

Retire-Canada

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Re: Your market predictions for 2025
« Reply #23 on: January 13, 2025, 09:11:31 PM »
I have ZERO control over the market. So, is the only thing that I can do is stay the course and dollar cost average forever?

I have no idea what's going to happen in the future so if I have excess money I invest it and if I need money to spend I sell shares. Beyond that I just hold and ignore market fluctuations.

GilesMM

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Re: Your market predictions for 2025
« Reply #24 on: January 13, 2025, 10:19:59 PM »
I expect a panic crash by summer. Buckle up.

vand

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Re: Your market predictions for 2025
« Reply #25 on: January 14, 2025, 05:44:09 AM »
No idea, but I think a more fun and useful quesiton is...

What are you market predictions for 2025.. and what are you doing about it?

After all, talk is cheap.

JupiterGreen

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Re: Your market predictions for 2025
« Reply #26 on: January 14, 2025, 07:35:29 AM »
I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors. 

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?

Beautifully written. I agree with this "prediction".

SeattleCPA

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Re: Your market predictions for 2025
« Reply #27 on: January 14, 2025, 07:53:17 AM »
I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors. 

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?

Beautifully written. I agree with this "prediction".

Yeah, sorry, but I don't.

But to answer the question, here are my two predictions for US returns:

CAPE-based: 1/CAPE+real growth in GDP

Gordon Dividend model based: Dividend percent on US stocks+Buyback percentage+real growth in GDP

I'd take the average, which is geometric mean (so long-run average).

The result is about 5% real return.


GilesMM

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Re: Your market predictions for 2025
« Reply #28 on: January 14, 2025, 09:53:18 AM »
I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors. 

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?

Beautifully written. I agree with this "prediction".

Yeah, sorry, but I don't.

...


Yea, mostly just an angry rant and a spitball.

roomtempmayo

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Re: Your market predictions for 2025
« Reply #29 on: January 14, 2025, 12:25:29 PM »
On Halloween 2025, the S&P will close below its level on Halloween 2024, 5705.

Valuations are stretched, and reversion to the mean happens.  The Fed keeps rates elevated because of new inflationary pressures from tax cuts, labor shortages, and tariffs.  Consumer credit is tapped out, and house poverty is widespread.  By October, there are no more tax cuts on the horizon, and the market comes to terms with the state of the economy.
« Last Edit: January 14, 2025, 12:30:58 PM by roomtempmayo »

Ron Scott

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Re: Your market predictions for 2025
« Reply #30 on: January 15, 2025, 03:02:22 PM »
According to Yardeni, (figure 7) analysts think the S&P500 will earn 243.31 in 2024 (up 10% from 221.36 in 2023). In 2025, earnings are expected to be 273.73, 12.5% higher than in 2024.

Margins, meanwhile, have been growing since 2023 and may approach 14% in 2025.

Operating earnings are expected to grow 14% (Yardeni, figure 10).

It would be erroneous to say stocks will simply rise with earnings, margins, or operating earnings, because two other big factors are involved: leverage and valuation. S&P500 companies on average ended 2024 with a debt/equity ratio of about 0.95, and a P/E ratio of 30.5.

Leverage increases the effect of rising earnings and rising margins on the value of equity, such that equity values can rise faster than earnings. This is how the S&P500 typically grows faster than its earnings. Valuation, on the other hand, has some very long-term mean reversion characteristics. Those mean-reverting pressures probably strengthen as we approach extreme levels, like a PE ratio of 30.5. So 2025 will be a tug of war between these fundamental forces, with growth*leverage pushing stocks up and valuation pushing down.

The chart says PE ratios above 30 have only been sustained for a few months at a time, historically. The PE sneaked above 30 for a few months in 1998-1999, again for almost a year in 2001-2002 during a recession, for almost a year in 2008-2009 (though this one was due to ttm earnings falling faster than stocks), and then for a few months between mid-2020 to early 2021 (due to earnings growth falling).

The relevant example would seem to be the late 1990s because that was a period of fast growth, no recession, and high valuations, among other similarities. All other examples of the S&P500 having a PE>30 occurred around recessions, when the trailing twelve months of earnings fell faster than the stock price. Investors price stocks based on the expectation of a return to growth in the future rather than the past, so they buy even when earnings are falling.

The 1998-1999 episode was resolved by high earnings growth, supporting a boom in prices of almost 30% in '98. Could the same occur in 2025, or did it already in 2024? If stock prices stayed the same, and earnings rose 14%, then the S&P500 would have a PE of 26.7 this time next year.

I think it could occur, and I think valuations are supported mostly by hope of fast earnings growth. That hope could be / will eventually be pierced if unemployment rises, or inflation rises.

I'm staying hedged to capture most of the upside and avoid most of the downside.

I’m going with this. He missed a few buzzwords but captured the alpha, so…

Ron Scott

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Re: Your market predictions for 2025
« Reply #31 on: January 15, 2025, 03:05:16 PM »
I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors. 

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?

Beautifully written. I agree with this "prediction".

I invest in stocks so by definition I’m guilty too. ‘cest la vie.

LightStache

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Re: Your market predictions for 2025
« Reply #32 on: January 17, 2025, 08:54:20 PM »
I predict the AI/Trump hype will continue propelling NASDAQ/S&P up 20% by year end, leaving us at a CAPE near the Dec 1999 ATH. Then in 2026 the bubble bursts, dot-com 2.0.

Macro conditions will slightly deteriorate throughout 2024 and inflation stays level, causing the Fed to pause rate cuts in March. As a result of these conflicting forces, bonds will mostly stay flat for the year.

Even though I predict 20% equities gains, I also think there's elevated risk of a downturn based on valuation, so I've modestly reduced my exposure. I might rotate back in if there's a pullback of ~15% or so.

firemane

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Re: Your market predictions for 2025
« Reply #33 on: January 19, 2025, 12:29:35 PM »
In no particular order.

-Tech stocks will continue to dominate the broader market, and NASDAQ will outpace SP500 again. Not sure on which tech stocks will gain the most, so I prefer ETFs.
-More layoffs in tech companies, which will help pump the stocks.
-Tesla will see significant pullback from ATHs based on pop culture and not because of its high valuation.
-Sectors that require more debt to function will continue to underperform, due to folks being to scared to invest in US treasuries due to tariffs, etc.
-Probably a lot of volatility that is not easily predicted unless very closely watched. Example, are we considering a good jobs report a good thing or a bad thing on a particular month... kind of depends on the the rhetoric around whether or not lowering interest rates is perceived as a possibility on that particular month.
-Valuations will remain extremely high, increasing long term risk.
-Real estate is location dependant, but I have already seen prices coming back down in both markets I live in 2024, particularly folks who bought in 2022+ are getting a reality check that real estate isn't always easy money. I saw a lot of folks expecting 75% gains from 2022 to 2024, lowering and lowering, then pulling off market when we hit winter. Some chickens could be roosting.
-I don't really care about crypto and haven't for years, but I like the idea of holding some just to eliminate fomo from the mind and focus on other things.

Many of my predictions last year were wrong, such as election outcome and interest rates. So maybe around 50% of this will be accurate.


Metalcat

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Re: Your market predictions for 2025
« Reply #34 on: January 19, 2025, 02:03:52 PM »
Absolutely no fucking clue. I'm posting here so that it will pop back up in my feed at the end of the year where you all review how accurate you were.

I'm in Canada, right now everything is basically up in the air thanks to Trump.

41_swish

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Re: Your market predictions for 2025
« Reply #35 on: January 19, 2025, 09:09:03 PM »
I could see the mega cap tech stocks returning another above average year, but not a 20% year. Trump becomes president tomorrow, so lets see.

Ron Scott

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Re: Your market predictions for 2025
« Reply #36 on: January 21, 2025, 10:26:17 AM »
I've been around long enough to have decided that there's really only one relevant prediction to make:  global capitalism will continue its inexorable march towards the self-destructive consolidation of wealth and power in the hands of a select minority (me!?) while quietly and continuously separating working people from the fruits of their labors. 

Right-leaning think tanks will continue to dominate economic policy-making under the guise of neoliberalism, which is really just a cleverly repackaged version of the old-school conservative ideas of deregulation, privatization, and government austerity that have consistently destroyed thriving economies by taking money away from the majority of working people so it can flow up the pyramid into the hands of billionaires who want to be trillionaires.

The vast majority of new wealth and prosperity created by hardworking Americans will continue to accrue primarily to a few thousand wealthy capitalists.  Median personal income in the US will continue to be flat or grow by < 1% per year, while the top 0.01% of "earners" aka capital owners will see their incomes continue to rise by 10% per year or more, compounded for one more year.  Again.

Everyone, from wealthy politicians to the wretched refuse of our own teeming shores, will pay lip service to correcting these problems while making no attempts to do anything about them.  The poor have no voice and the politicians rely on donations from the rich, so the rich will continue to make all of the decisions.  In a year's time we'll be 12 months closer to accepting the new American Oligarchy and most everyone will celebrate this as if it is a sign of our success.

Oh, and the sp500 will be up 11%.  Because who cares about all of that when there's money to be made?


LOL—a PERFECT post: it strokes the room’s political sensibilities while giving us enough humor to put that aside and focus on our wallets.

If you get called on the carpet for any of this you can always argue capitalism lifted a few billion people out of dire poverty before creating such inequity. That’ll keep their cognitive dissonance at bay on their “journey” from 60-40 to 90-10.

NIMBY neighborhood in a blue state anyone?

(Agree with 11% too.)

ChpBstrd

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Re: Your market predictions for 2025
« Reply #37 on: January 21, 2025, 02:26:45 PM »
“Day one” indicators are in:

1) The DOGE has been neutered! Scope was reduced to analyzing IT purchasing, a handful of employees, and just 18 months. Ramaswamy already bailed, and Musk might also have better things to do. $2T in cuts seem far, far away.
https://www.whitehouse.gov/presidential-actions/2025/01/establishing-and-implementing-the-presidents-department-of-government-efficiency/

2) Tariffs did not happen on day one. Instead we’re hearing about them maybe starting to happen in February. Markets are betting that deadline will be missed for the same reasons day one was missed. Trump appears to be attempting to gain Republican control over TikTok as a negotiation point with China, threatening large tariffs if the app isn’t fire-sold to allies.
https://www.cnn.com/2025/01/21/investing/us-stocks-trump-presidency/index.html


All together, the info at hand suggests term 2 will look a lot like term 1: deficits will rise, government spending will be used to prop up the economy, and tariffs will be more about making news and self-enrichment than actually changing the structure of the economy. Inflation will be the likely result, and as any student of recent economic history knows, 11 of the last 12 recessions, going back to 1948, started under Republican presidents. If Trump again directs himself toward culture wars on twitter and watching TV for much of the day, that recession might be 2-3 years away. That’s why markets are rallying. Investors are calling Trump’s bluff.

I’m staying tightly hedged and recently raised about $80k cash from selling my odd lots. With a minor part of the cash, I held my nose and picked up some if the gold ETF IAU. I sold some RDDT puts against another block of cash. The leftovers are parked in BIL and SHY. I don’t think we’re out of the woods yet with regards to tariffs, but the administration’s willingness to disregard day one promises is promising.

roomtempmayo

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Re: Your market predictions for 2025
« Reply #38 on: January 21, 2025, 04:00:17 PM »
If Trump again directs himself toward culture wars on twitter and watching TV for much of the day, that recession might be 2-3 years away. That’s why markets are rallying. Investors are calling Trump’s bluff.

The market is priced for the incoming administration to make noise and put on some cruelty theater, but otherwise do nothing of consequence.

bacchi

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Re: Your market predictions for 2025
« Reply #39 on: January 21, 2025, 04:00:58 PM »
Trump appears to be attempting to gain Republican control over TikTok as a negotiation point with China, threatening large tariffs if the app isn’t fire-sold to allies.

How much leverage is this, really? There are plenty of US assets in China, including Musk's Tesla plant. China could just cancel the Tesla land loan because of some obscure and ambiguous contract failure on Tesla's part.

MustacheAndaHalf

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Re: Your market predictions for 2025
« Reply #40 on: January 21, 2025, 05:29:40 PM »
According to Yardeni, (figure 7) analysts think the S&P500 will earn 243.31 in 2024 (up 10% from 221.36 in 2023). In 2025, earnings are expected to be 273.73, 12.5% higher than in 2024.

Margins, meanwhile, have been growing since 2023 and may approach 14% in 2025.

Operating earnings are expected to grow 14% (Yardeni, figure 10).

It would be erroneous to say stocks will simply rise with earnings, margins, or operating earnings, because two other big factors are involved: leverage and valuation. S&P500 companies on average ended 2024 with a debt/equity ratio of about 0.95, and a P/E ratio of 30.5.

Leverage increases the effect of rising earnings and rising margins on the value of equity, such that equity values can rise faster than earnings. This is how the S&P500 typically grows faster than its earnings. Valuation, on the other hand, has some very long-term mean reversion characteristics. Those mean-reverting pressures probably strengthen as we approach extreme levels, like a PE ratio of 30.5. So 2025 will be a tug of war between these fundamental forces, with growth*leverage pushing stocks up and valuation pushing down.

The chart says PE ratios above 30 have only been sustained for a few months at a time, historically. The PE sneaked above 30 for a few months in 1998-1999, again for almost a year in 2001-2002 during a recession, for almost a year in 2008-2009 (though this one was due to ttm earnings falling faster than stocks), and then for a few months between mid-2020 to early 2021 (due to earnings growth falling).

The relevant example would seem to be the late 1990s because that was a period of fast growth, no recession, and high valuations, among other similarities. All other examples of the S&P500 having a PE>30 occurred around recessions, when the trailing twelve months of earnings fell faster than the stock price. Investors price stocks based on the expectation of a return to growth in the future rather than the past, so they buy even when earnings are falling.

The 1998-1999 episode was resolved by high earnings growth, supporting a boom in prices of almost 30% in '98. Could the same occur in 2025, or did it already in 2024? If stock prices stayed the same, and earnings rose 14%, then the S&P500 would have a PE of 26.7 this time next year.

I think it could occur, and I think valuations are supported mostly by hope of fast earnings growth. That hope could be / will eventually be pierced if unemployment rises, or inflation rises.

I'm staying hedged to capture most of the upside and avoid most of the downside.

I’m going with this. He missed a few buzzwords but captured the alpha, so…

You highlighted "earnings" as a buzzword, meaning you don't think that word has existed for hundreds of years?
You're trying to insult someone's post as "buzzwords", but you're not using the term correctly.

joedad189

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Re: Your market predictions for 2025
« Reply #41 on: January 21, 2025, 07:31:14 PM »
PLTR to the mooooooon

Boom! Let's Go!


Ron Scott

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Re: Your market predictions for 2025
« Reply #42 on: January 22, 2025, 08:54:11 AM »
According to Yardeni, (figure 7) analysts think the S&P500 will earn 243.31 in 2024 (up 10% from 221.36 in 2023). In 2025, earnings are expected to be 273.73, 12.5% higher than in 2024.

Margins, meanwhile, have been growing since 2023 and may approach 14% in 2025.

Operating earnings are expected to grow 14% (Yardeni, figure 10).

It would be erroneous to say stocks will simply rise with earnings, margins, or operating earnings, because two other big factors are involved: leverage and valuation. S&P500 companies on average ended 2024 with a debt/equity ratio of about 0.95, and a P/E ratio of 30.5.

Leverage increases the effect of rising earnings and rising margins on the value of equity, such that equity values can rise faster than earnings. This is how the S&P500 typically grows faster than its earnings. Valuation, on the other hand, has some very long-term mean reversion characteristics. Those mean-reverting pressures probably strengthen as we approach extreme levels, like a PE ratio of 30.5. So 2025 will be a tug of war between these fundamental forces, with growth*leverage pushing stocks up and valuation pushing down.

The chart says PE ratios above 30 have only been sustained for a few months at a time, historically. The PE sneaked above 30 for a few months in 1998-1999, again for almost a year in 2001-2002 during a recession, for almost a year in 2008-2009 (though this one was due to ttm earnings falling faster than stocks), and then for a few months between mid-2020 to early 2021 (due to earnings growth falling).

The relevant example would seem to be the late 1990s because that was a period of fast growth, no recession, and high valuations, among other similarities. All other examples of the S&P500 having a PE>30 occurred around recessions, when the trailing twelve months of earnings fell faster than the stock price. Investors price stocks based on the expectation of a return to growth in the future rather than the past, so they buy even when earnings are falling.

The 1998-1999 episode was resolved by high earnings growth, supporting a boom in prices of almost 30% in '98. Could the same occur in 2025, or did it already in 2024? If stock prices stayed the same, and earnings rose 14%, then the S&P500 would have a PE of 26.7 this time next year.

I think it could occur, and I think valuations are supported mostly by hope of fast earnings growth. That hope could be / will eventually be pierced if unemployment rises, or inflation rises.

I'm staying hedged to capture most of the upside and avoid most of the downside.

I’m going with this. He missed a few buzzwords but captured the alpha, so…

You highlighted "earnings" as a buzzword, meaning you don't think that word has existed for hundreds of years?
You're trying to insult someone's post as "buzzwords", but you're not using the term correctly.

I believe Chp’s and my comments are tongue-in-cheek, so you can adjust your briefs now…

GuitarStv

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Re: Your market predictions for 2025
« Reply #43 on: January 22, 2025, 09:07:27 AM »
I predict a wild ride for us here in Canada once Trump's promised trade war and tariffs kick off on the first of Feb.

41_swish

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Re: Your market predictions for 2025
« Reply #44 on: January 22, 2025, 09:53:45 AM »
What are your predictions for the TSX100?

MustacheAndaHalf

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Re: Your market predictions for 2025
« Reply #45 on: January 22, 2025, 11:18:54 AM »
According to Yardeni, (figure 7) analysts think the S&P500 will earn 243.31 in 2024 (up 10% from 221.36 in 2023). In 2025, earnings are expected to be 273.73, 12.5% higher than in 2024.

Margins, meanwhile, have been growing since 2023 and may approach 14% in 2025.

Operating earnings are expected to grow 14% (Yardeni, figure 10).

It would be erroneous to say stocks will simply rise with earnings, margins, or operating earnings, because two other big factors are involved: leverage and valuation. S&P500 companies on average ended 2024 with a debt/equity ratio of about 0.95, and a P/E ratio of 30.5.

Leverage increases the effect of rising earnings and rising margins on the value of equity, such that equity values can rise faster than earnings. This is how the S&P500 typically grows faster than its earnings. Valuation, on the other hand, has some very long-term mean reversion characteristics. Those mean-reverting pressures probably strengthen as we approach extreme levels, like a PE ratio of 30.5. So 2025 will be a tug of war between these fundamental forces, with growth*leverage pushing stocks up and valuation pushing down.

The chart says PE ratios above 30 have only been sustained for a few months at a time, historically. The PE sneaked above 30 for a few months in 1998-1999, again for almost a year in 2001-2002 during a recession, for almost a year in 2008-2009 (though this one was due to ttm earnings falling faster than stocks), and then for a few months between mid-2020 to early 2021 (due to earnings growth falling).

The relevant example would seem to be the late 1990s because that was a period of fast growth, no recession, and high valuations, among other similarities. All other examples of the S&P500 having a PE>30 occurred around recessions, when the trailing twelve months of earnings fell faster than the stock price. Investors price stocks based on the expectation of a return to growth in the future rather than the past, so they buy even when earnings are falling.

The 1998-1999 episode was resolved by high earnings growth, supporting a boom in prices of almost 30% in '98. Could the same occur in 2025, or did it already in 2024? If stock prices stayed the same, and earnings rose 14%, then the S&P500 would have a PE of 26.7 this time next year.

I think it could occur, and I think valuations are supported mostly by hope of fast earnings growth. That hope could be / will eventually be pierced if unemployment rises, or inflation rises.

I'm staying hedged to capture most of the upside and avoid most of the downside.

I’m going with this. He missed a few buzzwords but captured the alpha, so…

You highlighted "earnings" as a buzzword, meaning you don't think that word has existed for hundreds of years?
You're trying to insult someone's post as "buzzwords", but you're not using the term correctly.

I believe Chp’s and my comments are tongue-in-cheek, so you can adjust your briefs now…

You again show you don't know what you're talking about.  ChpBstrd quoted a research firm, including links to back up his statements, and you call his post "tongue-in-cheek" after calling it full of "buzzwords".  You're full of shit, and should be the one checking their briefs.

You highlighted "earnings" and "p/e ratio" as buzzwords.  Those words have very specific meanings, and are not thrown around as "buzzwords" like you claim.  How much a company earns is their "earnings" - how is that a buzzword, or tongue-in-cheek?  And investors like to know how much they're paying (in price) for earnings, so "p/e ratio" is a well-known and old concept in investing.  It isn't some recent buzzword with vague meaning - which is why ChpBstrd provided a graph of P/E ratios over time, and discussed the risks of P/E ratios over 30.  People are paying too much for earnings.

I think you don't understand any of these terms, so you called them all buzzwards, showing your ignorance.  And since you can't defend that ignorance, now you're making up stuff about people's thoughts, claiming ChpBstrd was posting "tongue-in-cheek" or that the problem is me and my briefs.

GuitarStv

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Re: Your market predictions for 2025
« Reply #46 on: January 22, 2025, 11:40:15 AM »
What are your predictions for the TSX100?

I expect volatility.  Drops as the trade war kicks off and retaliatory gestures go back and forth, with occasional recoveries and then further drops.  Where it all ends, nobody knows.

41_swish

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Re: Your market predictions for 2025
« Reply #47 on: January 23, 2025, 08:23:28 AM »
What are your predictions for the TSX100?

I expect volatility.  Drops as the trade war kicks off and retaliatory gestures go back and forth, with occasional recoveries and then further drops.  Where it all ends, nobody knows.
How much do Canadians invest in the American markets? Is it common to buy an S&P 500 fund in CAD?

GuitarStv

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Re: Your market predictions for 2025
« Reply #48 on: January 23, 2025, 09:00:31 AM »
What are your predictions for the TSX100?

I expect volatility.  Drops as the trade war kicks off and retaliatory gestures go back and forth, with occasional recoveries and then further drops.  Where it all ends, nobody knows.
How much do Canadians invest in the American markets? Is it common to buy an S&P 500 fund in CAD?

Most of us invest a fair amount in the US.  I'm about 1/3 US with my equity investments, and I know many people who are 50% or higher.

clarkfan1979

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Re: Your market predictions for 2025
« Reply #49 on: January 23, 2025, 11:20:04 AM »
The average consumer in the United States will finally cut back on their spending because they are struggling to keep up with their minimum credit card payment. Economy has a small contraction and the S & P 500 is -3% for 2025. Unemployment increases by 0.5% and housing prices increase by 3%.