Economic resilience, market surprises, and new structural trends—2024 was anything but predictable. Quintet Private Bank unpacks the key lessons and strategies to embrace in the year ahead.
2024, A year that defied expectations
As we turn the page on 2024, one thing is clear: the world we invest in continues to evolve. The past year defied expectations, surprising us with economic resilience even as markets braced for turbulence. So, what did we learn, and how can we better prepare for what 2025 might bring? 2024 was a masterclass in unpredictability. Many economists and investors entered the year expecting a noticeable economic slowdown. Higher interest rates from central banks had, after all, been squeezing growth. But, as the year unfolded, we discovered that the global economy had more fight left in it than anticipated. Despite some concerns, the US avoided a recession, and the Eurozone and the UK only experienced mild downturns. China, after a tough period, picked up some steam towards the end of the year, adding some spark to global markets. That said, there were occasional spikes in market volatility that made us hold our breath.
But the story overall was one of growth – powered in no small part by structural themes, like the rapid rise of new technologies. So, what does this teach us? It’s a reminder that while forecasts are helpful, they can never fully account for the complexity of global markets. It’s a dance between maintaining conviction and showing adaptability when things change.
Daniele Antonucci, Co-Head of Investment & Chief Investment Officer, Quintet Private Bank.
2025 in a nutshell : A year of progress and contrasts
What should investors expect from 2025? Unlike 2024, the coming year appears set for a more moderate yet still dynamic economic path. However, while the economic outlook looks less uncertain, markets may still hold surprises.
Central Banks to continue cutting interest rates
As inflation continues to normalize, central banks are likely to cut interest rates further. However, a return to the ultra-low rates of the past decade remains unlikely. High debt levels and the risk of inflationary flare-ups—particularly in the U.S., where fiscal stimulus remains strong—suggest that central banks will only reduce rates to more ‘normal’ levels: around 3.5% for the U.S. and the UK, and 2% for the Eurozone. With cash yields likely to decline, investors may increasingly seek opportunities elsewhere.
A more ‘Normal’ pace of global economic growth
The U.S., supported by fiscal stimulus, is expected to remain resilient, with some upside potential for both growth and inflation over the longer term. By contrast, the Eurozone and the UK are likely to lag, with trade tariffs creating additional headwinds that could keep growth subdued. This divergence suggests that the U.S. dollar may remain strong in the near term, although rising U.S. government debt could weaken it over time.
China is likely to continue to grapple with its structural issues
Despite recent stimulus measures and policy changes, China continues to struggle with long-term challenges in real estate and demographics. These monetary and fiscal adjustments have brought some economic stabilization and triggered a short-term domestic equity rally. However, a more optimistic stance would require more far-reaching stimulus. Additionally, with a potential Trump presidency, concerns remain over trade tensions and the possibility of additional tariffs on China.
Market insights on equities & bonds
Positive on the US, cautious on Europe, not the time yet for emerging markets
Quintet Private Bank maintains a slight overweight position in equities, with a preference for U.S. markets. Given the high valuations of Big Tech companies, an equal-weighted index has been introduced to emphasize financials and industrials that could benefit from forthcoming U.S. policies, broadening the rally. European exposure has been adjusted to neutral, considering downside risks such as higher tariffs, while maintaining a hedging strategy in certain portfolios to mitigate declines in European equities.
Concerns about trade tensions with China, inflation, and rate hikes in Brazil are among the reasons why Quintet Private Bank currently holds no tactical positions in emerging market equities or debt.
Corporate credit is risky at current valuations, developed market sovereigns are attractive
Bonds continue to play a crucial role in diversification, and in some cases, they appear attractively valued. Alongside gold, which remains aligned with long-term allocation strategies, exposure to gilts has been increased, with a preference for short-dated bonds. U.S. Treasuries also remain in focus, though with an underweight position due to fiscal concerns.
Exposure to European and U.S. investment-grade corporate credit has been reduced, as current valuations do not adequately compensate for the risks. Similarly, high-yield bonds remain underweight. With U.S. fiscal policies potentially becoming more inflationary, shorter-dated U.S. inflation-protected bonds have been swapped for longer-dated ones.
Thriving in a complex world
2025 will be a year of balancing optimism with pragmatism. The world is changing, but with change comes opportunity. By focusing on structural trends, staying agile, and monitoring both short- and long-term shifts across public and private markets, investors can be better prepared for whatever the future holds.
As the year unfolds, one principle remains key: successful investing is not about predicting every market movement but about staying invested, maintaining diversified portfolios, and positioning for the opportunities ahead.
For further insights into investment themes for 2025, Quintet Private Bank’s full report is available for download here.
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