Charles Schwab: Expects an optimistic outlook for the U.S. stock market in 2025, optimistic about the performance of the financial and communication sectors
Charles Schwab expects an optimistic performance for U.S. stocks in 2025, particularly favoring the financial and communication sectors. Despite a healthy market, volatility may be significant, with the S&P 500 index expected to grow by an average of 5.3%. The bond market will impact the stock market, especially during periods of high inflation. Investors need to be cautious of the risks brought by policy interweaving, while the mainland and Hong Kong stock markets are relatively cheap, and policy support will become a future investment theme
According to the Zhitong Finance APP, Charles Schwab's Hong Kong financial advisor Lin Changjie stated that the overall performance of the US stock market is expected to be good in 2025, but due to many unstable factors, volatility is also expected to be large. He indicated that from the current situation, the market is in a relatively healthy position, with the S&P 500 index consistently above its 50-day and 200-day moving averages, and he expects an average growth of 5.3% for the S&P 500 index this year. At the same time, he believes that the financial sector will still benefit from the relatively high interest rate environment, and he is optimistic about the financial and communication sectors, while the consumer discretionary sector may underperform the market; the materials sector is expected to record negative growth in 2024, indicating weak demand for major commodities, and investments in related sectors need to be cautious.
Charles Schwab's Hong Kong financial advisor Guo Mingshen pointed out that this year, bonds will have a significant impact on stock market performance, especially if inflation remains high and unstable. In the second half of 2024, the rolling one-year correlation between the S&P 500 index changes and the 10-year Treasury yield is expected to rebound to nearly zero, which is undoubtedly positive news for the stock market. If this situation continues into 2025, the relationship between the market and inflation may return to a favorable position.
However, if inflation volatility rises again (which will be more evident after the implementation of tariffs and labor policies), stocks may face more risks derived from bonds. Although the bank remains optimistic about the global and US market outlook this year, investors also need to be vigilant about related risks amid the intertwining effects of various policies.
Guo Mingshen also believes that the current value of the mainland and Hong Kong stock markets is relatively cheap, and policy support is expected to be a future investment theme