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Investors preparing for 2025 should consider 10 predictions that will have an impact on their portfolio.
First, valuations and fundamentals will matter more this year. For over a year, traders relied on momentum to “trade the rip.” In the former case, inflation will continue to cause companies to increase prices. This pressures customers, hurting demand and profit margins. The most appealing food stocks include Mondelez (MDLZ), Pepsi (PEP), Coca-Cola (KO), and Hershey Company (HSY).
Second, economists might need to raise their GDP estimates for the U.S. economy. Banks like Citigroup (C) and Bank of America (BAC) may rise as the economy heats up in 2025.
Third, Nvidia is one of many chip suppliers in the artificial intelligence market that dominate. Taiwan Semiconductor (TSM) and Broadcom (AVGO) will also thrive.
Fourth, bitcoin (BTC-USD) may trade to new highs. Investors will want an alternative to gold.
Fifth, U.S. treasury bond prices may fall. The government will increase its spending.
Sixth, fund managers may rotate out of the S&P 500 (SPY) and into the small-cap (IWM). The latter has better value.
Seventh, China’s yuan will depreciate below 7.5 to the U.S. dollar.
Number eight is mortgage rates rising. This hurts homebuilders.
Ninth is inflation rates slowing by mid-year. The U.S. may weaken its tariff rates.
Last, lower corporate taxes will help companies grow their profits. Watch conglomerates like P&G (PG) and Johnson & Johnson (JNJ).
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