Goldman Sachs The Markets Why US stocks could keep rising in 2025
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Dec 20, 2024 Ashok Varadhan, Co-Head of Goldman Sachs Global Banking & Markets, dives into the recent fluctuations in US stocks driven by the Fed's rate-cutting forecasts. He discusses whether the market's downturn is an overreaction and emphasizes the resilience of leading companies amid changing economic indicators. Varadhan explores potential growth in US capital markets by 2025, highlighting challenges and opportunities in private markets, investment strategies in emerging markets, and how fiscal support and normalized interest rates could reshape the landscape.
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Market Overreaction?
- The Federal Reserve's lowered rate-cutting forecast for 2025 caused US stock drops.
- This might be an overreaction given the current economic climate.
U.S. Exceptional Growth
- Despite high valuations in equities and credit markets, U.S. exceptionalism and GDP growth are expected to continue.
- Focus on marquee companies with strong market positions and earnings.
Market Rebound
- Private markets have grown but public markets are expected to rebound in 2025.
- This includes higher equity and debt capital markets activity, M&A, and pro-cyclical administration policies.