The analysts of the US investment bank Wells Fargo published ten forecasts for the new year at the end of 2024. These cover both macroeconomic trends, expected technological progress and geopolitical developments.
• Wells Fargo with ten forecasts for 2025
• More AI competition and rethink on the stock market awaited
• Confidence for US economy
Analysts of the US investment bank Wells Fargo, led by Christopher P. Harvey, head of the stock strategy, published a number of predictions in the late 2024 in which they deal with the economic and technological environment that should shape 2025. The forecasts of the US Bank deal with many different subject areas, such as macroeconomic trends and geopolitical developments, but also with market movements and anticipated technological advances.
Forecasts of the Wells Fargo analysts: New developments in the US stock market
The Ki-Trade 2025 is likely to be breathed in new life on the US stock market, according to the Wells Fargo experts. Because they expect new breakthroughs in the large voice models (Large Language Models, LLMS) Grok3 from Xai and Llama 4 from Meta. These would exceed the performance of previous LLMs and train about 100,000 GPU clusters – three times more than the standard – according to the US bank according to “Investing.com”. This will lead to a tightening of the competition in the AI area, the analysts continue.
Wells Fargo 2025 also expects the next large milestone to accept digital assets. For example, the Coinbase stock is likely to be recorded in the first quarter of 2025 in the market-wide US index S&P 500, the team around Christopher P. Harvey writes according to “Investing.com”. This step would not only reflect the increasing mainstream acceptance of crypto analagas, but also the increasing risk to risk of investors and strengthen momentum-driven strategies, it is said.
With regard to the wider market, the head of the stock strategy at Wells Fargo, according to “Seeking Alpha”, expects investors to prefer organic volume growth compared to sales growth through price increases. Such a preference had already emerged as part of the balance sheet season for the third quarter of 2024. “The companies will take note of this and limit the price increases,” Harvey wrote according to “Seeking Alpha”. As a result, this will have a slightly positive effect on the development of inflation.
In general, the analyst team expects the performance of Large Caps 2025 to be better, so that portfolio managers who are underweighted at the Mega Caps, which were most recently responsible for the strength of the US stock market, are allowed to achieve better returns. According to “Investing.com”, the reason for this will be new regulatory adjustments that will at least partially restore the balance on the stock market.
Macroeconomics and geopolitics: stronger economy, falling inflation
With a view to the US economy, one of the central points in the predictions of Wells Fargo is the expected recovery of US BIP. The consensus estimates here in spring 2025 are likely to increase from currently 2.1 percent to 2.5 percent, according to the analysts. “This could help to drive the share prices up in the first half of 2025, but prepare a ‘normal’ correction in summer,” said the analysts according to “Investing.com” in their letter to customers.
According to the US investment bank, unexpected capital gains would also ensure that the forecast for the US deficit in 2025, which is currently $ 1.89 trillion, would be corrected downwards. As a result, this will ensure a “contrary tailwind” for US state bonds on the bond market.
At the geopolitical level, the trade relationships between the United States and China will continue to deteriorate because the US government will impose new tariffs on imports from China. The Chinese government will react to this with retaliation measures, but at the same time also cushion the effects of the US tariffs through relief for domestic companies, of which China’s economy will ultimately benefit, according to the analysts according to “Seeking Alpha”.
Meanwhile, US inflation will decrease in the course of the year, Harvey and his team forecast. “The fears that tariffs boost inflation will prove to be unfounded,” said the Wells Fargo experts according to “Seeking Alpha”. In addition, consumer demand is likely to decrease in the second half of 2025, which will lead to the core inflation of 3.3 percent further weakening from its current level.
Further forecasts for US real estate market and Trump presidency
In addition to these forecasts for the US economy and the stock market, the report also includes two more predictions. A recovery of the US real estate market is expected in the second half of the year. According to the analysts, interest rates for 30-year-old mortgages would currently fall from 6.7 percent to 5.5 percent, since investors “more trust in a slow and steady Fed [gewinnen]because the Forward Guidance focuses on normalizing interest rates that reduce the interest rate volatility, “says” Seeking Alpha “in the letter.
In addition, the Wells Fargo analysts also see positive developments for Donald Trump’s presidency. In 2025, the Republicans would continue to benefit from the currently prevailing momentum in voter registrations and thus increase their chances of keeping the congress in the 2026 election. According to “Investing.com”, the experts also expect a historical change in Nevada: for the first time since 2007, the number of registered voters could shift in favor of the Republicans in the US state.
Editor finance.net
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