BT Mark to Market: Economic growth and market projections for 2025
IN the first episode of Mark to Market for 2025, senior correspondent Ben Paul sheds light on the current economic landscape - a year poised with significant uncertainties and opportunities. At the forefront is the robust performance of the US economy despite forecasters’ previous predictions of an inevitable recession.
US economic landscape
US economic growth has been resilient, buoyed by strong private domestic final purchases (PDFP), low unemployment rates, and manageable inflation. The Federal Reserve’s recent hawkish shift in monetary policy, aimed at containing inflation, reflects this economic strength and has further implications for global investors.
Paul then pivots to the market’s reaction to the US presidential election results, where Donald Trump’s victory brings about concerns regarding unconventional policymaking.
Market watchers speculate on the effects of Trump’s policies, including potential tax cuts, deregulation, and import tariffs. These policies could boost US economic growth and corporate profits, but Paul suggests keeping an eye on potential higher government debt with implications for global trade and geopolitics.
Asia perspective
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In the context of the S&P 500, the episode highlights the index’s impressive performance in 2024 despite the sell-off following the Fed’s rate cut announcements. Projections for continued economic expansion and corporate earnings growth suggest potential further advances in the S&P 500, but Paul emphasises the need for investors to differentiate between fears and realities.
He suggests that Asian markets, including Singapore, could benefit from shifts in global production and investment flows amid the US-China tensions and the Fed’s rate policies.
Singapore unlocked
Focusing on the Singapore market, the Straits Times Index (STI) displayed robust performance in 2024, driven mainly by the three major banks – DBS, OCBC, and UOB. While the STI’s Real Estate Investment Trusts (Reits) lagged, there’s potential for recovery if inflation and interest rates decline more rapidly than expected.
Furthermore, the possibility of value unlocking through corporate restructuring offers exciting opportunities for savvy investors. Pail highlights a significant development to watch for the year in his podcast.
Listen now to the episode for his full insights which might help steer your investment decisions for 2025. A year which presents various risks but also offers ample investment opportunities for those who remain informed and agile.
Mark to Market is a podcast of BT Correspondents. Look out for the next episode featuring wealth editor Genevieve Cua, and if you have any thoughts or questions, feel free to reach out to us at btpodcasts@sph.com.sg.
Written and hosted by: Ben Paul (benpaul@sph.com.sg)
Edited by: Howie Lim & Claressa Monteiro
Produced by: Ben Paul & Howie Lim
Engineered by: Chai Pei Chieh
A podcast by BT Podcasts, The Business Times, SPH Media
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