Ausbiz – bull vs bear market outlook for 2025
Last week, I joined Juliette Saly on Ausbiz to discuss the contrasting bull and bear market outlooks for 2025.
On the bearish side, concerns are mounting over a weakening global and U.S. economy. Bears point to falling earnings expectations, a decline in containership activity, cuts to U.S. capital expenditure plans, rising manufacturing costs, and deteriorating consumer sentiment. They also flag that the S&P 500’s price-to-earnings (P/E) ratio is now above 20 – though it’s worth noting that high valuations don’t necessarily lead to market declines.
On the other hand, the bulls argue that the market is looking ahead, not backward. They believe the worst of the Trump-induced volatility is behind us, with the most disruptive version of his tariffs soon to be replaced by a more palatable version – lifting investor confidence.
We also touched on the risk of a U.S. recession, which seems less likely now when compared to forecasts from earlier this year. The ideal backdrop for equities is positive GDP growth combined with disinflation. Growth remains positive for now – so the question investors are asking is: what will inflation do?
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
