Original author: Stoic
Original text translated by: Shenchao TechFlow
Extracting core views from top global institutions for you, 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 view
· Global economic growth: It is expected that global economic growth will continue in 2025, but significant slowdowns may occur in the Chinese economy.
· Stock market forecast: The S&P 500 index is expected to reach 6500 points, but global stock markets may exhibit divergence.
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 U.S. 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 benchmark forecast believes that global economic growth is resilient, but the persistence of inflation will limit further easing of monetary policy 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.
Benchmark scenario forecast
· Global economic growth is strong.
· U.S. stocks and gold are expected to perform well, but the outlook for oil and base metals is less optimistic.
2. Blackrock's core view
· Special market environment: The current market is in a unique phase where long-term assets react abnormally strongly to short-term events.
· Investment strategy: Continue to favor risk assets and further increase positions in U.S. stocks, as 'AI themes are rapidly expanding'.
· Inflation and interest rates: Inflation and interest rates are expected to remain above pre-pandemic levels.
2025 Market Outlook
· Inflation pressures: Due to increasing geopolitical divisions, and the acceleration of spending driven by 'AI infrastructure development and low-carbon transition', inflationary 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, inflation stickiness, and increased market volatility, investors may demand higher risk premiums, leading to rising long-term government bond yields.
Key investment themes
· AI-driven investment boom: The AI race will continue to drive market investment.
· U.S. stocks continue to lead: U.S. stocks are expected to continue performing well, but investors need to remain flexible in responding to market changes.
· Focus on risk signals: Such as soaring long-term bond yields or escalating trade protectionism, all of which may become key signals for adjusting investment strategies.
3. Deutsche Wealth's core view
Against the backdrop of a 'challenging economic environment', inflation may remain high due to 'increased fiscal spending and potential tariff hikes'.
'This will limit the space for central banks to stimulate the economy through interest rate cuts, forcing them to seek a balance between growth and inflation control. This uncertainty may change market expectations and trigger more volatility than in 2024. Additionally, geopolitical conflicts arising from changes in trade policy may further exacerbate market instability.'
Asset allocation themes
· The U.S. 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 U.S. stock market.
Investment recommendations:
- Focus on the long-term positive trends in economic growth.
- It is recommended to adopt a diversified investment portfolio and engage in active risk management.
Key point summary
· Despite geopolitical tensions and high interest rates, global economic growth is expected to slightly increase from 2.6% in 2024 to 2.7% in 2025-26.
· Although short-term growth prospects have improved, the growth of most economies globally remains below average levels of the 2010s.
· Global inflation is expected to slowly decline, averaging 3.5% in 2025. Central banks may remain cautious in easing policy.
· Risks from geopolitical conflicts and climate disasters still exist, especially impacting fragile economies more severely.
· Policy recommendations include supporting green and digital transformation, promoting debt relief, and improving food security.
4. Key points of the World Bank Group 2025 outlook
· Despite facing challenges from geopolitical tensions and high interest rates, global economic growth is expected to remain at 2.6% in 2024. By 2025-2026, this growth rate may slightly increase to 2.7% as trade and investment gradually pick up.
· Although short-term growth prospects have improved, overall performance remains weak. During the 2024-2025 period, nearly 60% of economies will experience growth rates below the average level of the 2010s, representing over 80% of global economic output and population.
· Global inflation is expected to ease more slowly than previously anticipated, with this year's average inflation rate reaching 3.5%. As inflationary pressures persist, central banks may be more cautious when relaxing monetary policy.
· Recent multiple shocks have caused many emerging markets and developing economies to stagnate while trying to catch up with developed economies. Data shows that nearly half of EMDEs have underperformed developed economies from 2020 to 2024. For those fragile economies severely affected by conflict, future prospects are even bleaker.
· Although risks are somewhat balanced, the overall trend remains toward downside risks. Major 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 above challenges, global policies need to focus on the following areas:
- Maintain the stability of the international trading system.
- Promote green and digital transformation to support sustainable economic development.
- Provide debt relief support to help alleviate pressure on highly indebted countries.
- Improve food security issues, especially in fragile economies.
· For emerging markets and developing economies, high debt levels and repayment costs pose 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 drive 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 female labor force participation.
5. Goldman Sachs's core view
'2025: A key year for exploring excess returns'
· Interest rate declines coinciding with economic growth may benefit the stock market.
· Current stock valuations are approaching high levels, and future profit growth will be the main driver of the market.
· Since October 2023, global stock markets have risen by 40%, making the market more vulnerable to negative news.
· The S&P 500 index's gains are among the strongest since 1928. The Nasdaq index rose more than 50%, while NVIDIA's increase was as high as 264%. This trend is mainly driven by expectations of 'inflation peaking' and 'Federal Reserve policy shift'.
· The rise in price-to-earnings ratios has led to stock and credit valuations reaching historical highs, especially as the performance in European and Chinese markets is approaching long-term averages and is no longer undervalued.
· Although stock valuations are high, this does not entirely suppress the possibility of further increases. However, high valuations could exert some pressure on future returns.
· Large U.S. tech companies have performed well, primarily due to strong profit growth, and their valuation levels reflect their quality fundamentals rather than excessive market speculation.
Risk analysis
The two main risks mentioned in the report are:
1. Recent market optimism has already overdrawn some returns, making the market more vulnerable to adjustment shocks.
2. There are still many unknowns regarding tariff risks, which may create uncertainties.
Goldman Sachs emphasizes the strategy of 'using diversified investments and obtaining excess returns (alpha)' to address these risks.
Specific strategies include:
· Broaden investment scope and participate in more asset classes;
· Look for potential value investment opportunities;
· Achieve geographical investment diversification to spread risks.
6. Morgan Stanley's market view
Core themes
1. Market valuations are high. Morgan Stanley believes current market valuations are generally too high, and most investors no longer consider asset prices cheap. Therefore, it is recommended to prioritize obtaining excess returns (alpha) through optimized asset allocation and investment choices, rather than relying solely on overall market returns (beta).
2. The bull market is entering an optimistic phase. The market is entering the 'optimistic phase' of the bull market, which is typically the later stage of a bull market, likely followed by the 'euphoric phase', the final sprint before a bear market. Morgan Stanley states, 'The market performance in 2025 remains promising.'
3. The impact of generative AI on private markets. The potential impact of generative AI on private markets is considered one of the key themes for 2025. The rapid development of this technology may bring new opportunities and challenges for private equity investment.
Summary and recommendations
From the perspectives 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. These insights can serve as references for investors in formulating their strategies.
It is important to note that these views are not absolute truths but rather provide different perspectives for investors to compare and analyze.
If this content receives 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, and I would be very interested in further research.
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