Potential pullback in early 2025 markets due to rising investor complacency, but long-term rally expected.

From Investing.com: 2024-12-09 01:33:30

Financial markets could see increased volatility in the first half of 2025 due to rising investor complacency and bullish sentiment under President Trump’s administration, according to Yardeni Research analysts.

Yardeni analysts predict a potential pullback in the Nasdaq as it nears 20,000, with investors delaying profit-taking to avoid immediate tax liabilities, leading to portfolio rebalancing early in 2025.

Despite near-term turbulence, Yardeni remains optimistic about market prospects for 2025, expecting the index to reach 22,000 by late 2025, driven by economic resilience and improving corporate performance.

President Trump’s decision not to replace Fed Chair Jerome Powell and discussions on deficit reduction led by Elon Musk and Vivek Ramaswamy could provide long-term fiscal benefits, supporting the strength of the U.S. economy.

Geopolitical developments like the overthrow of Bashar al-Assad in Syria could reduce regional uncertainties, potentially impacting Middle East dynamics, according to Yardeni Research.

Yardeni Research believes that although the beginning of 2025 may be volatile, long-term trends indicate a strong setup for the broader market, maintaining a bullish outlook with caution against investor complacency.



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