Macquarie Asset Management Group (Macquarie) projected that the global stock market next year will create a generally positive environment due to falling interest rates and robust gross domestic product (GDP) growth.
Macquarie noted in its report, ‘2025 Outlook: Plan for Growth and Prepare for Volatility,’ that the equity premium is currently stable at long-term average levels, and expects stock investors to receive rewards for additional risk-taking during this cycle.
However, it is anticipated that there will be significant policy volatility next year and that geopolitical issues could affect revenue. He emphasized that 'it is important to assess the market meticulously, as there have been frequent instances where stock market performance diverged from macroeconomic fundamentals over the past few years.'
Macquarie projected that the global real estate market will benefit the most from falling interest rates. Macquarie analyzed that 'real estate, as an asset class, has historically been very sensitive to interest rates,' and that 'real estate yields generally show a strong correlation with economic growth, indicating that a solid global growth, coupled with falling interest rates, is likely to have a significant impact.'
Regarding the global bond and credit market, Macquarie stated that 'most of the monetary policy easing by central banks has already been priced into interest rate markets, and as credit spreads have narrowed, the potential for aggressive price increases in the future is limited, but absolute yields will still remain strong compared to the past.'
Head of Macquarie Global, Ben Way, said, 'However, political challenges to the existing system and the resulting changes in government and policy, along with heightened geopolitical tensions worldwide, stand in contrast to constructive outlooks for the global economy next year.'