Outlook 2025: Sabrina Denis, Janus Henderson Investors

Outlook 2025: Sabrina Denis, Janus Henderson Investors

6 januari 2025

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Sabrina Denis (photo archive Janus Henderson Investors) 980x600.jpg

By Sabrina Denis, Senior Portfolio Strategist, Janus Henderson Investors

 

What are the main opportunities and threats for 2025?

‘Looking towards 2025, the economic landscape presents both opportunities and threats, shaped by a mix of monetary policies, global economic trends, and geopolitical dynamics. A ‘soft landing’ for the economy is becoming more plausible, buoyed by global rate cuts, stimulus measures from China, and a rebound in US economic indicators.

For equities, the environment suggests a shift towards small- and mid-cap stocks in the US and emerging markets, particularly China, as they stand to benefit more directly from rate cuts and economic stimuli. This shift is underpinned by the potential for broader earnings growth outside the US large-cap segment, offering a more attractive risk-reward profile in a cautiously optimistic global economic outlook.

In fixed income, the current rate environment presents a nuanced picture: the onset of a rate-cutting cycle and a stable economic backdrop support tighter spread, offering attractive opportunities, especially in securitized assets that provide a margin of safety compared to corporates. However, the economic strength also poses a challenge by putting upward pressure on yields, particularly the 10-year yields, necessitating a careful selection within fixed income investments to balance yield and risk.

The overall positive outlook is tempered by the need for late-cycle caution. As such, the main opportunities lie in the potential for growth in specific equity and fixed income sectors, supported by monetary easing and economic stability. Conversely, the primary threats include the potential for economic slowdown, labour market challenges, and geopolitical risks.’

 

A ‘soft landing’ for the economy is becoming more plausible.

 

 

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