market correction: Mark Matthews sees risk of 20% market correction in 2025, warns valuations are high - The Economic Times.
Budget 2025's starry aim: Does India need more funds to fuel its cosmic dreams? Market Expert Ruchir Sharma says that the stock market's momentum looks likely to sputter in 2025 and that it could falter as investors grow wary of the US's mounting debt problems.
When we bumped up our end-2025 forecast for the S&P 500, we implicitly assumed EPS would rise to $280 (280 x 25 = 7,000) by end-2025. S&P 500 EPS have since climbed steadily and appear on course to reach $280 this year. This has largely reflected continued strong growth in EPS in the three big-tech sectors combined.
As of today, the markets are currently forecasting just one rate cut in 2025 (www.cmegroup.com). U.S. 10-year Treasury Bond yields remain in the range bound between 4.0% and 5.0%. S&P 500 earnings fail to increase the consensus rate of 14% in 2025 but all 11 S&P 500 sectors post positive EPS growth.
Anticipated 10-year annualized returns for U.S. equities fell 0.4 percentage points as of November 8, 2024, to a range of 2.8% to 4.8%, reflecting hefty valuations.
In particular, consider the remarkable gains in the S&P 500 Index, which was on track to close up more than 25% for 2024, well ahead of Wall Street analysts' forecasts, in one of its strongest annual performances of the last quarter-century.
Stock market recovery ahead? Emkay Global in its latest strategy note said the domestic stock market could remain weak till March and that a stability is likely from April onwards, with earnings outlook improving and the FPI selling abating by then. Consumption should bounce back from the second half of 2025, it said.
The market is in a holding pattern, but there is good news
Overall, Realtor.com economists expect 2025 to bring slightly lower mortgage rates coupled with moderate price growth, which means that would-be buyers are not likely to see any dramatic changes in housing costs.
Market corrections
A market correction is considered to be a decline of 10% or more from the recent closing high. That means that historically speaking, the S&P 500 has experienced a correction every 1.84 years. It would not be out of line to have the expectation that the market could correct every two years or so.
If you're taking a long-term perspective on the stock market and are properly diversifying your portfolio, it's almost always a good time to invest. That's because the market tends to go up over time, and time in the market is more important than timing the market, as the old saying goes.
Key Takeaways. The Rule of 72 is a simple way to estimate how long it will take your investments to double by dividing 72 by your expected annual return rate. Higher-risk investments like stocks have historically doubled money faster (around seven years) compared with lower-risk options like bonds (around 12 years).
William Blair analysts call Vernova stock "a "top pick" for 2025, as artificial intelligence (AI) data centers consume vast amounts of energy. Wall Street expects Vernova earnings to boom 174% per share in the year ahead on 5% sales growth. GE Vernova stock flourishes a Composite Rating of 92 and RS Rating of 98.
$3,000 X 12 months = $36,000 per year. $36,000 / 6% dividend yield = $600,000. On the other hand, if you're more risk-averse and prefer a portfolio yielding 2%, you'd need to invest $1.8 million to reach the $3,000 per month target: $3,000 X 12 months = $36,000 per year.
Fast forward to 2024, and the market continues to show strength. As of August 2024, the Dow Jones Industrial Average has gained nearly 12%. This performance would make even the most optimistic bull investor smile.
Key views on markets for 2025
After the double digit returns of 2023 & 2024, global and Australian shares are expected to return a far more constrained 7% in the year ahead.