Economic and Market Outlook – January 2025
The information in these articles is current as of 1 January 2025.
Welcome to our latest Economic and Market Outlook – January 2025.
This edition covers the following topics:
Australian economy
Despite recent interest rate hikes and rising global uncertainty, the Australian economy is showing resilience. We dive into the surge of employment growth that defined 2024, as well as the impact of government spending. Looking to the future, we explore the RBA’s potential path to cutting interest rates and the geopolitical implications of the incoming Trump administration. Discover more of our views below.
International economy
On the global front, the impact of incoming President Trump looms large with the US facing a range of reforms as part of his policy agenda including potential trade conflict from a slew of new tariffs while the Eurozone grapples with political instability and economic challenges. Over in China, the new US President poses fresh challenges on trade relations with the US whilst policymakers try to reinvigorate their economy and combat a weak demand backdrop. Find out more on our outlook below.
Outlook and sector view for Australian equities
The Australian outlook remains problematic with inadequate stimulus in China to date weighing on our mining sector whilst other segments, notably the major banks, now trade at record high valuations without, in our view, the fundamentals to justify current pricing. 2025 looks to be a potentially challenging year. Learn more about our perspectives below.
Outlook for international equities
Global markets observed a boost in 2024, enhanced by a weakening Australian dollar. The US market remains dominant with anticipation of a Trump presidency’s tax cuts helping underpin returns as well as the ongoing interest and investment in artificial intelligence. However, Trump’s incoming tariff and immigration policies may pose headwinds to equity performance given the potential impact on US consumers. We detail more on our findings below.
