2025 promises to be a financial year that promises excellent earnings. This is what emerges from the report Decalia SAthe Swiss investment management company, entitled “Outlook for 2025: What will happen after the performance of the US Grand Crus”.
2024 will also be considered a particularly positive year, especially for the US stock markets, with theS&P500 up by as much as 26.5%. As recently as two years ago the consensus view of the US outlook went from an impending US recession (2023), to tepid earnings growth with a soft and shaky landing (2024), to double-digit earnings forecasts and no landings (to date).
“Even well-known bearish strategists like Mike Wilson (Morgan Stanley) e Dubravko Lakos (JPM) threw in the towel and predicted a rise inS&P500 within a year… which makes us slightly more reserved, in all honesty, as we prefer to have a high conviction (positive) compared to a more neutral/negative consensus, as in 2023 and 2024,” reads the report.
The report also confirms the positive outlook for 2025, driven mainly by AI and the Trumpian economic agenda: “The AI super cycle indicates that the associated technology is expanding beyond investments in the hardware infrastructure layer to monetize AI (e.g. with software applications).” As for the agenda Trumpthe positive aspects derive from the centrality placed “on the optimization of government costs with the initiative DOGE and, to a lesser extent, on a strong push for deregulation and a program of reindustrialisation”.
These factors lead Decalia SA to project “higher earnings growth and, therefore, we expect earnings growth in 2025 to be higher (and even more widespread) than the already rosy top-down expectations for US earnings. This is the fundamental principle of our (more moderate) positive vision, which helps companies grow in their (high) multiples.”
As far as productivity is concerned Decalia states that “the situation is trending positively” for US domestic industrial sectors, software companies, and US midcaps, while it is “potentially negative” for “some pockets of the healthcare sector, given the rather hostile rhetoric of the ‘administration Trump and the dramatic increase in healthcare costs relative to GDP in many countries, and especially in the United States”, negative instead for “Europe, given that it risks being the most affected by tariffs, directly and indirectly (for example, being a dumping ground for Chinese products), but this too is very consensual”.
In conclusion, Decalia continues “to see a rise in stock markets, with theS&P500 which could take off in the first half of 2025 from the bottom of the devil’s number hit in 2009 (i.e. 666 to 6660), with a fruitful environment for bottom-up stock pickers, like us, as equity participation increases expand. This should benefit the high-conviction, but always balanced, approach that we have consistently applied over the years to our multi-thematic expertise.”
