Original author: Stoic
Original text translated by: Deep Tide TechFlow
Summarizing the core views of top global institutions, saving hundreds of pages of report reading time.
Data sources: J.P. Morgan, Blackrock, Deutsche Wealth, World Bank, Goldman Sachs, and Morgan Stanley.
1. J.P. Morgan's core viewpoint
· Global economic growth: Global economic growth is expected to continue in 2025, but the Chinese economy may experience a significant slowdown.
· Stock market forecast: The S&P 500 index is expected to reach 6,500 points, but global stock markets may show divergent performances.
Global Market Outlook
In the coming months, market trends will be influenced by the interaction between macroeconomic trends and monetary policy, while policy changes from the new US government will also bring uncertainty.
Technological innovation, especially the 'continuation of the AI boom,' will be an important factor driving the market.
Interest rate outlook
The baseline forecast suggests that global economic growth remains resilient, but the persistence of inflation will limit the space for further monetary policy easing in 2025.
However, the new Trump administration may bring risks, such as overly aggressive trade and immigration policies that could impact the supply side and undermine global market confidence.
Baseline scenario forecast
· Global economic growth is strong.
· US stocks and gold are expected to perform well, but the outlook for oil and base metals is not optimistic.
2. Blackrock's core viewpoint
· Special market environment: The current market is in a unique phase, with long-term assets reacting unusually strongly to short-term events.
· Investment strategy: Continue to favor risk assets, further increasing positions in US stocks, as the 'AI theme is rapidly expanding.'
· Inflation and interest rates: It is expected that inflation and interest rates will remain above pre-pandemic levels.
2025 Market Outlook
· Inflation pressures: Due to worsening geopolitical divisions and accelerated spending driven by 'AI infrastructure development and low-carbon transitions,' inflation pressures are expected to persist.
· Federal Reserve policy: The Federal Reserve is unlikely to significantly cut interest rates, and rates are expected to remain above 4%.
· Long-term bond yields: Given budget deficits, sticky inflation, and increased market volatility, investors may demand higher risk premiums, leading to rising long-term treasury yields.
Key investment themes
· AI-driven investment boom: The AI race will continue to drive market investment.
· US stocks continue to lead: US stocks are expected to continue performing well, but investors need to be flexible in responding to market changes.
· Pay attention to risk signals: such as surging long-term bond yields or escalating trade protectionism, which could be key signals for adjusting investment strategies.
3. Deutsche Wealth's core viewpoint
In the context of a 'challenging economic environment,' inflation may remain high due to 'higher fiscal expenditures and potential tariff increases.'
‘This will limit the central banks’ ability to stimulate the economy through interest rate cuts, forcing them to seek a balance between growth and inflation control. This uncertainty may alter market expectations and trigger more volatility than in 2024. Additionally, geopolitical conflicts triggered by changes in trade policies may further exacerbate market instability.’
Asset allocation themes
· The US economy may achieve a soft landing, with robust economic growth and strong investment.
· Focus on growth stocks, but be wary of high volatility risks.
· Corporate profit growth and large-scale stock buybacks will benefit the US stock market.
Investment recommendations:
- Focus on the long-term positive trends in economic growth.
- It is advisable to adopt a diversified investment portfolio and engage in proactive risk management.
Key points summary
· Despite the existence of geopolitical tensions and high interest rates, global economic growth is expected to slightly rise from 2.6% in 2024 to 2.7% in 2025-26.
· Despite improved short-term growth prospects, the growth of most global economies remains below the average level of the 2010s.
· Global inflation is expected to gradually decline, averaging 3.5% in 2025. Central banks may remain cautious in terms of policy easing.
· Risks such as geopolitical conflicts and climate disasters persist, especially affecting vulnerable economies.
· Policy recommendations include supporting green and digital transformations, promoting debt relief, and improving food security.
4. Key points from the World Bank Group's 2025 outlook
· Despite challenges from geopolitical tensions and high interest rates, global economic growth is expected to remain at 2.6% in 2024. By 2025-2026, as trade and investment gradually rebound, this growth rate may slightly increase to 2.7%.
· Despite improved short-term growth prospects, overall performance remains weak. During the 2024-2025 period, nearly 60% of economies worldwide will have growth rates below the average level of the 2010s, accounting for over 80% of global economic output and population.
· Global inflation is expected to ease more slowly than previously anticipated, with an average inflation rate of 3.5% this year. As inflationary pressures persist, central banks around the world may be more cautious in loosening monetary policy.
· Recent multiple shocks have caused many emerging markets and developing economies to stagnate in catching up with developed economies. Data shows that nearly half of EMDEs are underperforming compared to developed economies between 2020-2024. For those vulnerable economies severely affected by conflict, future prospects are even bleaker.
· Despite some balance in risks, the overall outlook remains dominated by downside risks. The main risks include:
- Geopolitical tensions persist.
- Global trade divisions may intensify.
- High interest rates may persist for a long time, compounded by ongoing inflationary pressures.
- Frequent natural disasters related to climate change.
· To address the challenges mentioned above, global policies need to focus on the following areas:
- Maintain stability in the international trading system.
- Promote green and digital transformation to support sustainable economic development.
- Provide debt relief support to help alleviate pressures on highly indebted countries.
- Improve food security, especially in vulnerable economies.
· For emerging markets and developing economies, high levels of debt and their repayment costs present a severe challenge. These countries need to find a balance between meeting enormous investment demands and maintaining fiscal sustainability.
· To achieve long-term economic and social development goals, countries need to adopt the following policy measures:
- Increase productivity growth to enhance economic efficiency.
- Improve the efficiency of public investment and ensure proper use of funds.
- Strengthen human capital development, such as education and skills training.
- Narrow the gender gap in the labor market and enhance women’s labor participation rates.
5. Goldman Sachs' core viewpoint
‘2025: A key year for exploring excess returns’
· Interest rate declines and economic growth occurring simultaneously may be favorable for the stock market.
· Current stock valuations are approaching high levels, and future profit growth will be the main driving force behind the market.
· Since October 2023, global stock markets have risen by 40%, making the market more susceptible to negative news.
· The S&P 500 index has seen one of its strongest increases since 1928. The Nasdaq index rose by over 50%, while NVIDIA's increase reached as high as 264%. This trend is primarily driven by expectations of 'peak inflation' and a 'shift in Federal Reserve policy.'
· The rise in price-to-earnings ratios has led to stock and credit valuations reaching historical highs, especially as the performance of European and Chinese markets is approaching long-term averages and is no longer undervalued.
· Despite high stock valuations, this does not completely suppress the possibility of further increases. However, high valuations may exert some pressure on future returns.
· Major US tech companies have performed exceptionally well, primarily due to strong profit growth. Their valuation levels reflect high-quality fundamentals rather than excessive market speculation.
Risk analysis
The two main risks mentioned in the report are:
1. Recent market optimism has already overdrafted some returns, making the market more susceptible to adjustment shocks.
2. There are still many unknowns regarding tariff risks, which may bring uncertainty.
Goldman Sachs emphasizes the strategy of 'diversifying investments and obtaining excess returns (alpha)' to address these risks.
Specific strategies include:
· Broaden investment scope and participate in more asset classes;
· Seek out promising value investment opportunities;
· Achieve geographical investment diversification to mitigate risks.
6. Morgan Stanley's market view
Core themes
1. Market valuations are high. Morgan Stanley believes that current market valuations are generally too high, and most investors no longer see asset prices as cheap. Therefore, it is recommended to prioritize obtaining excess returns (alpha) through optimizing asset allocation and investment choices rather than relying solely on overall market returns (beta).
2. The bull market has entered an optimistic phase. The market is entering the 'optimistic phase' of the bull market, which is often the later stage of a bull market, followed by possibly a 'frenzy phase,' which is the last sprint before a bear market arrives. Morgan Stanley states, 'The market performance in 2025 is still worth looking forward to.'
3. The impact of generative AI on the private equity market. The potential impact of generative AI on the private equity market is considered one of the key themes for 2025. The rapid development of this technology may bring new opportunities and challenges for private equity investments.
Summary and Recommendations
From the views of various institutions, some common trends and themes can be identified, such as high market valuations, the impact of AI technology, and the importance of diversified investments. This content can serve as a reference for investors in formulating strategies.
It is important to note that these views are not absolute truths but provide different perspectives for investors to compare and analyze.
If this content garners attention, I plan to write a dedicated article exploring the prospects of the cryptocurrency market. If there are other reports or materials from research institutions worth noting, please feel free to recommend them to me; I would be very happy to explore further.
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