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By: Serach Nissim
The year 2024 ended up being a boon, with the S&P 500 gaining 23% and ending off with its best two-year run since 1999. Experts are now wondering if the gains are here to stay, if they can be outdone, or if a recession will follow in 2025. The Federal Reserve had helped the economy by curbing interest rates in 2024. The market upswings had directly followed the rate cuts. The Fed already announced in a December meeting that they expect less interest rate cuts this year, in fears of inflation.
As per a recent Crain’s article, despite this, many banks and market players have been expressing glowing optimism for 2025. “Bull market is alive and well in 2025,” read a prediction from Bank of Montreal, which guessed the stock market will gain another 14 percent this year. An analyst from Deutsche Bank forecast the stock market will go up by 21%. Even Morgan Stanley, one of the more bearish firms, said it expects an 11% gain for the year. Many of the analysts are confident that the incoming Trump Presidency, tax-cut extensions and lighter regulation will keep the bull markets going.
Still, the impending higher tariffs, trade wars, and immigration crackdowns can take a toll, and some say that even Trump won’t be able to work miracles in his first year. Crain’s also tapped into the predictions made by Henry Weingarten, a “cosmic value investor,” who examines economic data and market trends in line with the planets and stars. Last year, he had accurately predicted market success and Fed cuts. This year, his soothsaying’s are less optimistic.
He predicts a global recession, maybe as early as July. He is worried about escalating debt, borrowers’ ability to repay, rising inflation and the possibility of higher interest rates. Per Crain’s, Weingarten acknowledged that the president-elect is “the most pro-stock market president in history,” but said even he can’t override the power of celestial bodies. Weingarten predicts a “rock on a cloud” phenomenon beginning July 25, based on the orbits of Saturn and Neptune, which has in the past been linked with major disruptive events, including the fall of the Berlin Wall in 1989. “We see high recession odds by the summer of 2025,” Weingarten said. “There are great fiscal and economic challenges.”
The new year will also include the race for NYC mayor. Incumbent Mayor Eric Adams has said he will have his name on the ballot no matter what, despite his dwindling approval rate and the federal bribery trial against him scheduled for April 21. For now, the election is a big unknown, with a crowd of well-known contenders eyeing the mayoral seat.
NYC’s success in 2025 will also depend on developers and whether they will follow through with ambitious building plans. Office development has virtually been at a halt since the pandemic. Developers have signaled that they are ready to push forward adding Class A new commercial space, but the problem has been finding anchor tenants—without which construction loans are difficult to obtain. Per Crain’s, one project with a good chance of breaking ground this year is at 350 Park Ave. The planned office tower to be developed by Vornado Realty Trust and Rudin Management already has Ken Griffin’s investment firm, Citadel, lined up as an anchor tenant.
