Preview of the Setup for 2025…
December 30, 2024
Here is a preview of the setup we see for 2025. Projections and analysis will follow on January 9, 2025. The information for the annual projections model will be a continuation of what we have presented for the past 16 years.
To start, no one know what is going to happen after Trump takes office. Will he do nothing, was all of his rhetoric just to get the white evangelical vote? Probably not but interestingly many forecasters are projecting a mild upward 2025 with AI still at the core, I would not be too sure about that.
2025 is more likely in my view to be marked by extreme volatility in both directions. One has to keep in mind that Trump is both a supreme marketer and supreme manipulator. And his campaign talk about doing tariffs, corporate tax cuts, and reducing deficits are at the core contrary to each other.
And of course there is the goal of assimilating Canada, taking over the Panama Canal, and buying Greenland. Couple this with rounding up millions of immigrants who are illegal because Congress never put together a program to allow legal immigration for much needed workers as the US moves toward a net zero birth/death ratio.
All of this within an envelope that Trump is no stranger to big plans, his history is one of doing a lot of stuff on other people’s backs, they pay the price, and he takes the spoils until he loses it all on the next project. So be prepared.
For us this means one needs a baseline from which to navigate. We are using the same basic Macro Model that we have used in years past. The core components are:
- Aggregate Macro Input/Demand Creation Factors.
- A) GDP output
- B) Money Supply
- C) Fed Balance Sheet
- D) Fiscal deficit/credit figures
- E) Consumer Confidence
- Output Multiplier Factors
- Macro Price Indexes with Projections
- A) S&P Prices (SPX)
- B) Nasdaq 100 Prices (NDX)
- C) Bond Prices (TLT)
- D) Gold Prices (GLD)
- E) Commodity Prices (CRB)
A core concept for our forecast revolves around the liquidity that the economy generates and where that liquidity goes, i.e. what portion go to stocks, bonds, gold, or commodities. The data utilized goes back to 2005, before the Housing Boom and the Bernanke 2009-2011 rescue.
Complete projections coming on January 9th.