Bloomberg Surveillance Where the Equity Rally Goes in 2025
13 snips
Jan 3, 2025 
Neil Dutta, head of US Economic Research at Renaissance Macro Research, discusses rising bond yields and the likelihood of a recession in 2025. Priya Misra of JP Morgan Asset Management offers insights on the potential for a US soft landing and peak rates in fixed income markets. Mike Wilson, Morgan Stanley’s Chief US Equity Strategist, analyzes the resilience of the equity market, contemplating where traders might see volatility in the upcoming year. Together, they navigate the complexities of the economic outlook amid changing financial landscapes.
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Fed Reversal
- The Federal Reserve's December meeting was a complete reversal from the prior meeting.
- They seemingly prejudged policy outcomes, impacting rate cut expectations.
Interest Rate Drivers
- Rising interest rates are primarily due to increasing term premiums, not improved growth expectations.
- This rise tightens financial conditions and can negatively affect stocks.
Housing Market Outlook
- The housing market outlook appears weak due to high mortgage rates and a cooling labor market.
- Increasing inventories, especially in the South and West, signal reduced construction activity.