Markets: several reasons which suggest that the stock market will rise further in 2025

The S&P500 is on track for a second consecutive year of growth of more than 20%. This has only happened four times in history, Bank of America reports:

• 1927/1928 (with the continuation that we know, which resulted in -12% in 1929 and -28% in 1930)
• 1935/1936 (followed by a stinging -37% in 1937, start of the recession of 1937/1938, caused by budgetary austerity and restrictive monetary policy)
• 1954/1955 (with more “normal” sequels, +3% in 1956 and -14% in 1957)
• 1995/1996 (followed by a “magical” period, +31% in 1997 and +27% in 1998, to which we can even add 1999, +19.5%)

Morality? Double gains of 20% are generally followed by strong variations, both upwards and downwards. For BofA, 2025 could be a year of growth for the S&P500, for several reasons that I cite:

• “The Trump administration sees rising stocks and cryptocurrencies as a tool to stimulate “animal spirits” and few believe Trump will allow a bear market”
• Global macroeconomic data will be buoyant in the near term because businesses anticipate tariff surcharges (Long Beach Port imports hit record high) and stockpile labor ahead of immigration controls (requests for unemployment benefits fall)
• Bond yields remain in the Goldilocks zone as the downward catalysts of debt and renewed inflation are offset by:
  • Bullish catalysts for global central bank rate cuts expected in 2025 (BofA expects 124 cumulative rate cuts worldwide next year),
  • Geopolitical risk
  • The fact that the market believes that Trump is aware that policy mistakes could lead to a new wave of inflation in 2025, and that he will seek to avoid this (by being less radical than he claims to be?).

To end on an (evil) symbol, the American bank recalls that the S&P500 had fallen to 666 points at the lowest point of the subprime crisis (666.79 points precisely during the session on March 6, 2009). He is currently on the verge of 6000 points, so why not aim for 6666 points next year? ????