RiskReversal Pod

Paradigm Shifts: Valuations, Earnings & What The Market Holds In 2025 with Cameron Dawson

14 snips
Jan 3, 2025
Cameron Dawson, Chief Investment Officer at NewEdge Wealth and a frequent voice on Bloomberg and CNBC, joins the conversation to dissect market dynamics as we head into 2025. They delve into the surprising market shifts of 2024, including valuation concerns and the growing impact of passive investing. Dawson shares insights on the Mag Seven and upcoming fixed income volatility, discussing the implications of rising interest rates on corporate debt. The group emphasizes the need for cautious optimism while exploring strategies in value stocks and international markets.
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INSIGHT

2024 Market Surprise: Valuation Re-Rating

  • The 2024 market surprise was the re-rating to 2020-2021 highs despite tighter Fed policy and rising interest rates.
  • Valuations didn't act as a ceiling, driven by tech excitement and overall market re-rating.
INSIGHT

2025 Earnings Growth: A Show-Me Story

  • Market breadth in 2024 was narrow due to concentrated earnings growth primarily from MAG7 stocks.
  • 2025 earnings estimates assume a shift where the remaining 493 companies drive growth, posing a potential challenge.
INSIGHT

Passive Investing's Dominance and Warning Signs

  • Passive investing, with its trillion-dollar inflows, dominates market dynamics and ignores traditional metrics like valuations.
  • Indicators like the Shiller Index (CAPE ratio) flashing red, reaching levels last seen in 1999 and the late 1920s.
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