DWS: The possibility of continued strong gains in the US stock market in 2025 is low, and gold is expected to trade in a narrow range.

German asset management company DWS has released its market outlook for January 2025. DWS Global Chief Investment Officer Vincenzo Vedda stated that the S&P 500 index saw a impressive 24% increase in 2024, but the market rally was mainly led by a few tech stocks, with the "Big Seven" US stocks contributing two-thirds of the increase. He said that after the sharp increase in US stocks, valuations are being digested, and the likelihood of the stock market continuing this rally in 2025 is low. After the astonishing rise in gold prices in 2024 (up 26% in US dollars), the bank predicts that gold prices will fluctuate in a relatively narrow range. He mentioned several market signals worth noting: since October 2022, the MSCI Global Index has risen 60%, the S&P 500 Index has risen 70%, and stock prices have surged sharply; cash holdings have reached a ten-year low, while the allocation of US stocks is significantly high. Geopolitical tensions are unstable, coupled with heavy challenges facing US tech stocks, the market is facing adjustment pressures at any time. Despite the many variables in the market, Vedda remains cautiously optimistic about the stock market outlook for 2025, mentioning the steady performance of the US economy and job market, the continued recovery of corporate profits, and the likely peak of the rise in long-term bond yields. Vedda believes that the momentum of the US economy remains strong. The new president, Trump, is proposing to ease regulations, adjust trade policies, and implement expansionary fiscal measures, which are expected to add momentum to US economic growth. In terms of inflation, US inflation continues to cool down, but if large-scale tariffs and tightening immigration policies are implemented, it may slow down the pace of inflation decline. Easing regulations is expected to promote growth in US corporate profits. Due to the favorable outcome of the US elections, the bank has raised its rating of the US stock market relative to the MSCI Global Index to short-term neutral. The bank currently has the most confidence in the healthcare sector, believing that this sector can achieve steady defensive growth at a reasonable price. By 2030, India is expected to surpass Germany and Japan, becoming one of the major global economies alongside the US and China. Compared to other Asian countries, India has significantly lower labor costs, increased infrastructure investments, policies promoting economic growth, and India's stock market being included in major stock market indices, all of which create a favorable capital market environment for India.