The Market’s Biggest Risks and Opportunities in 2025 — ft. Tom Lee
Dec 12, 2024
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Tom Lee, co-founder and managing partner at Fundstrat Global Advisors, shares his keen insights on the market's trajectory for 2025. He predicts a peak for the S&P at 7,000 early in the year, followed by a downturn. Lee highlights the expected success of small and mid-cap stocks, while discussing the dollar's enduring strength in a Bitcoin-friendly landscape. He also tackles the potential pitfalls of AI, government tariffs, and the evolving economic advisory role needed to navigate future market risks and opportunities.
Tom Lee predicts that the S&P could reach 7,000 in 2025, driven by upcoming performance from small and mid-cap stocks.
The acquisition of Interpublic by Omnicom signifies a major consolidation in an advertising industry increasingly challenged by digital platforms.
The evolving legal challenges facing TikTok may jeopardize its functionality in the U.S., impacting its future and user base drastically.
Deep dives
Turning Points in Business Success
Turning points often define successful companies, as demonstrated by founders who shared their experiences with significant challenges. For instance, Dropbox faced a disastrous public launch that ultimately taught them valuable lessons, leading to viral success shortly after. These make-or-break moments can drastically alter a company's trajectory and highlight the importance of resilience and adaptability in entrepreneurship. Founders emphasize the need to navigate such crises to establish enduring and influential companies.
Holiday Spending Trends
Recent reports suggest that the average American consumer is expected to spend a record amount during the holiday season, signaling a robust economy. A specific figure of $902 was highlighted, reflecting increased consumer confidence and spending capacity. However, discussions surrounding personal holiday experiences reveal contrasting sentiments, including frustrations related to early family dynamics and gift-giving expectations. These candid reflections illustrate the mixed emotions often tied to holiday traditions and consumer behavior.
Advertising Agency Consolidation
The acquisition of Interpublic by Omnicom marks a significant consolidation within the advertising industry, creating the world's largest agency. This move comes amid a changing landscape where traditional advertising agencies struggle to maintain revenue against growing digital platforms. The discussion emphasizes the shifting focus of ad spending toward big tech firms like Google and Facebook, which dominate the market. These changes necessitate that agencies adapt or face potential obsolescence in a rapidly evolving digital environment.
The Future of TikTok in America
The legal landscape surrounding TikTok is rapidly evolving, with implications for the app's future in the U.S. After a federal appeals court upheld the TikTok ban, the situation becomes precarious, as the app may not be able to receive updates, leading to functional decline. Various scenarios are discussed, including a potential sale to a U.S. company or the possibility of appealing to the Supreme Court, although both outcomes seem unlikely. Overall, it is projected that TikTok's existence in America may become increasingly tenuous within the next year.
OpenAI's New Subscription Model
OpenAI's introduction of a $200 monthly subscription for its ChatGPT Pro version aims to monetize its large user base effectively. This model offers enhanced capabilities, including access to advanced features and capabilities for more complex queries. Although early user experiences have indicated mixed results, the potential for massive revenue generation is clear. If a small percentage of the millions of OpenAI users subscribe, the company could achieve substantial annual revenue, rivaling other established tech firms.
Scott and Ed open the show by discussing Omnicom’s acquisition of Interpublic, an update on the TikTok ban, and OpenAI’s new ChatGPT pro subscription. Then Tom Lee, the co-founder, managing partner and head of research at Fundstrat Global Advisors, joins the show to discuss his outlook for 2025, including why the S&P might hit 7,000 next year before retreating in the second half. He explains why he thinks small and mid-cap stocks will be successful, and why he believes the dollar could maintain dominance in a more Bitcoin friendly world. Tom also breaks down the potential downsides of AI, tariffs, and the Department of Government Efficiency.