This week saw some interesting market developments and forecasts and we have picked several of them for our weekly review:
RBC Sees S&P 500 Rising to 6,600 by End of 2025
RBC Capital Markets has set on Monday its initial year-end 2025 S&P 500 price target of 6,600, which is 10.6% higher than the closing price on Nov. 22.
“The story the data tells us is that another year of solid economic and earnings growth, some political tailwinds, and some additional relief on inflation can keep stocks moving higher in the year ahead,” RBC said in a note.
Yet, analysts at the investment bank do not exclude challenges to the market, such as sudden increase in 10-year yields, the dialing down of Fed cut expectations, and the recent surge in the US dollar.
RBC’s forecast is much in line with last week’s consensus of Goldman Sachs and Morgan Stanley who suggested that by the end of 2025 S&P 500 could reach 6,500.
Fed to Cut Rates by 25 bps in December, ECB To Continue Too
Analysts at the UBS investment bank expect the Federal Reserve to cut the interest rate by 25 basis points in December, according to a note.
After that, the experts see a slowing of the pace and forecast a cut once per quarter in 2025. The Fed is expected to cut rates by a total 125 basis points by end-2025, bringing its target rate to 3.25% to 3.5%, which UBS describe as neutral levels.
Meanwhile, the European Central Bank (ECB) Vice President Luis de Guindos told the Helsingin Sanomat Finnish daily that the eurozone c-bank will keep cutting rates as inflation keeps falling and will focus on stimulating economic growth, which currently is fragile.
“Concerns about high inflation have shifted to economic growth,” he said. “The trajectory of our monetary policy is clear – if our projections are confirmed, we will continue making our monetary policy stance less restrictive.”
Bitcoin Slides Further Away from $100,000 Milestone
Bitcoin slid further away from the psychological $100,000 mark as investors continued with their profit-taking, extending Monday’s 5% decline. On Tuesday afternoon, it fell 2.5% to around $92,300, with other tokens also in the red. Ether, the second-biggest coin, fell 4.4% to $3,330.29 while the sol token dropped 9.3% to trade at a price of $228.31.
The entire crypto market capitalisation — calculated by multiplying total coins in circulation by price — dropped $182 bln. to $3.35 trln.
Later in the week, however, the most popular cryptocurrency started rising again, to reach around $97,400 on Friday afternoon.
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This article is for information purposes only. It does not post a buy or sell recommendation for any of the financial instruments herein analysed.
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