2025 still has many surprises in store for the markets
We all knew 2025 was going to be a year of significant change, driven by Donald Trump’s return to the White House, but I don’t think many people predicted how much would be changing this quickly.
In just a week, the geopolitical order has been rewritten with the US and Russia starting talks over ending the Ukraine war, with Ukraine itself and other European nations not invited to the discussions.
While the excluded leaders have reacted with dismay, stock prices have surged on the prospect of the war ending and energy prices coming down.
Meanwhile, in the US, the SEC has rushed in a change that should make it easier for companies to exclude certain shareholder proposals, such as those focused on ESG issues, from their proxy statements.
The move wasn’t unexpected, but the timing has caught many people off-guard given that the SEC is currently reviewing which shareholder proposals should make it to a vote.
The decision ‘moves the goalposts smack dab in the middle of this year’s shareholder proposal process,’ said commission member Caroline Crenshaw in a statement.
Adding to the sense of upheaval, inflation may be making a comeback – at least it seems so, after official data from the UK this week showed that prices unexpectedly rose 3 per cent in January.
Global markets are worried that Trump’s tariff plans will also fuel a new round of global inflation, forcing central banks to rein back planned cuts to interest rates.
Amid all this disruption, what do investors think? Apparently, they are not too fazed by proceedings so far, with global stocks climbing over the last week and US equities touching a new record on Tuesday.
Bank of America’s monthly fund manager survey for February, which polled investors earlier in the month, reports that investors are more bullish than they have been in the last 15 years.
The survey, based on responses from more than 200 global investors, finds that cash levels are at their lowest levels since 2010.
The outlook for economic growth and lower interest rates means investors are ‘long stocks, short everything else,’ says BofA strategist Michael Hartnett in a note.
For public companies, the picture suggests an opportunity to attract investors, but also a new set of economic and political risks. IR teams will need to stay agile with their communications, given that 2025 should have plenty more surprises in store.
How are you addressing economic and political changes in your messaging? Get in touch and let us know at [email protected] or on LinkedIn.
