Dear Reader,
The Gregorian calendar has scrolled to 2025 — for good — or ill.
As a keen observer of market affairs, I am duty-bound to hazard a 2025 market forecast… such as it is.
So today I fetch my crystal ball from storage, blow away the dust… and gaze for images of the year ahead.
How will the economy fare in 2025? The stock market? Gold? Oil? Bitcoin?
The answers — the guaranteed answers — anon.
Yet before we glimpse what markets will do in 2025, let us observe how they ended 2024.
The Worst Ending Since 1966
Zero Hedge reminds us that:
- The S&P 500 rose 24.9% in 2024 – almost perfectly matching 2023’s gain of +24.7% (and the best gain since 2021)… Of course the year’s big winner was ‘AI’ and everything related to it…
Thus the New Year’s bubbly went down well — for AI investors in particular.
Yet we must consider the sting in the tail. Zero Hedge also reminds us that 2024 concluded with a mighty zap.
The mightiest zap, that is, in nearly 60 years:
- The year ended on a down-note with the S&P 500 down 4 days in a row to end the year… something that hasn’t happened since 1966.
Inconclusive Data
Should you then flee from stocks in 2025? Let us glance backwards to 1967, the year following 1966’s late sting.
The annals inform us that stocks jumped over 20% in 1967. Thus I can read you no cautionary tale.
The 1967 example — if you take anything from it — is that you should disregard the late 2024 sting.
Yet we behold what practitioners of the statistical sciences label “limited sample size.”
Thus its predictive power falls under question.
Gold, Bitcoin, Oil
Let us next consider the Midas metal:
Gold also soared in 2024 to a new record high. In fact, it was gold’s best year since 2010.
And Bitcoin?
- For the second year in a row, Bitcoin’s annual gains topped 100% (+156% in 2023, +119% in 2024), pushing it to a new record high also.
Next we come to the slick, oozy gook:
- Oil ended the year basically unchanged having traded in a tight range ($67-72) for the last four months as pump-prices kept falling.
Down-Trending Economy
Let us now expand our focus.
In which direction is the United States economy veering as it enters 2025? Once again, Zero Hedge:
- US economic data also ended the year on a definite down-trend, seemingly (mysteriously) turning down right as Trump won the election… 2024 was a stagflationary year with inflation data surprising to the upside and growth disappointing.
I have observed these ominous straws swaying in the wind. I have climbed atop my roof and yelled warnings about them.
Yet I concede there are positive counter-currents running the opposite way. Perhaps they will wash away the gathering negative currents.
And perhaps my yells will prove yells of wolf. I have yelled wolf before.
So now we come to my own tub-thumping predictions for 2025 — predictions guaranteed to knock you to the floor…
Three Stunning Predictions
Prediction No. 1:
In 2025 the stock market will rise. Or the 2025 stock market will fall. Or — or — it will conclude 2025 precisely where it began 2025.
Prediction No. 2:
Bitcoin, gold and oil will likewise rise, fall — or hold steady.
Prediction No. 3:
The economy will expand in 2025 — unless it contracts. Bear in mind: the economy may do neither.
There you have it — three thundering predictions for 2025.
I venture out upon the thin, thin branches… and risk a horrible plummet if mistaken.
Yet recall your Latin: Audentes fortuna iuvat — Fortune favors the bold.
I implore you to invest your monies accordingly.
Updated Forecast
Yet upon deeper consideration, I alter my 2025 stock market prediction.
I do not retract it — but modify it.
In reminder, moments ago I stood resolute upon my bedrock… and argued:
- In 2025 the stock market will rise. Or the 2025 stock market will fall. Or — or — it will conclude 2025 precisely where it began 2025.
Yet as Zero Hedge reminds us:
- Americans have never been this confident that stocks will rise in the next 12 months. We wish them luck.
“Americans have never been this confident that stocks will rise in the next 12 months.”
Thus I believe stocks are in for heavy weather this year.
I am not convinced of it — false convictions have forced too much crow down my gullet across the years.
Yet I believe it.
That is because I am by nature distrustful of crowds.
The Boat Is Overloaded to One Side
When the crowd is loaded onto the boat’s starboard side, I jump instinctively to port — and vice versa.
And the crowd presently flocks on one side of the boat. I stand therefore upon the other side of the boat, by my lonesome self.
The solitary approach may be lonely. It may be worrisome — the human animal is a pack animal — he seeks the crowd’s safety.
Yet over time the solitary strategy, the contrarian strategy, has proven the sturdy strategy.
Not at all times, not in each instance. I will concede the rare exception.
Yet it is the overall dependable strategy.
And as economic commentator Bill Bonner likes to say:
“It is always dawnest before the dark.”
Skies are presently dawnest.
And so I repeat: I believe stocks are in for heavy weather this year.
Markets Are Far Too “Top-Heavy”
Central to my reasoning is the lack of market “breadth.” Too few stocks are hauling too many stocks.
And if the wagon-pullers shed steam… the market sheds steam.
The stock market is simply too “top-heavy.” Morgan Stanley strategist Michael Wilson:
- One of the key technical factors I’ve used over time to gauge the health of equity markets is the breadth of participation by the underlying stocks…
- December has exhibited some of the worst breadth in history while stock indices have remained near all-time highs. This anomaly is unusual…
- In my experience, ignoring breadth is usually a bad idea, and [last]week suggests that breadth has anticipated what we learned on [Dec. 18] – i.e., the Fed may not be able to deliver as much accommodation as markets were expecting.
No One Will Remember My Forecast
What is the fantastic beauty of today’s forecast — from my perspective?
It is this: Not one reader will recall today’s forecast on Jan. 1, 2026.
He will no more recall it than what he munched for dinner Tuesday evening last.
Yet if my crystal-gazing proves true? Then this Nostradamus shall gloat forever and ever about his superior powers of divination.
I will never permit you to forget it.
And if my crystal-gazing proves false, remember this:
My “advice” is free. And as the phrase runs, you get what you pay for in life.
At least you are receiving your money’s worth…
Regards,
Brian Maher
for Freedom Financial News
