2024 was a whirlwind year for global markets. Defined by softer central bank policies, declining interest rates, and geopolitical tensions, it also saw an extended rally in financial markets led by AI-driven Big Tech stocks. Non-tech sectors joined the rally, narrowing the valuation gap, while financials stood out with robust performance. However, optimism didn’t reach all corners — European carmakers, luxury goods producers, and Chinese markets struggled.
2025 promises to build on the lessons and opportunities of the past year. Join Ipek Ozkardeskaya as she discusses the markets with Glenn Coxon, Feyyaz Alingan, Carlos Martin Doncel, and Ludovica Scotto di Perta on the Swissquote Channel.
2024 was defined by softer central bank policies, declining interest rates, heightened geopolitical tensions, elections, political drama, strikes, and wars — yet also an extended rally in global financial markets. Big Tech stocks, particularly AI-related companies, continued their ascent, while the rally broadened to include non-technology sectors. Lower interest rates allowed these sectors to partially close the gap with their tech counterparts. Financials had a particularly strong year.
However, not all markets shared in the optimism. European carmakers, luxury goods producers, and Chinese stock markets were notably excluded from the global risk rally. In China, repeated fiscal and monetary stimulus measures fell short of investor expectations, preventing a sustained recovery in stock prices and limiting price rebounds.
A blend of a more accommodative Fed policy and Donald Trump’s ‘America First’ agenda ignited a surge in risk appetite in the final quarter of 2024, benefiting cryptocurrencies and small-to-mid-cap US stocks, but Trump’s tariff threats stalled the rally in US’ major trade partners’ stock markets.
At the same time, Trump’s pro-growth initiatives and mass deportation plans began to erode dovish expectations for the Fed.
The Fed officials issued a cautionary signal during their final policy meeting of the year. They raised their growth and inflation forecasts and scaled back plans for 2025 rate cuts from four to just two, underscoring the growing challenges ahead.
The major central banks — except the Bank of Japan (BoJ) — will certainly remain accommodative, but some — like the European Central Bank (ECB) — are expected to give a stronger support to their economies provided that Trump’s tariff threats weigh heavily on their growth outlook.
The euro is now expected to weaken to parity against the US dollar.
Across the Channel, sterling weathers the Trump shock better than its European peers as the UK economy looks less concerned by the tariff threats for now. Britain has its own issues however. The Bank of England (BoE) has successfully reined in inflation this year, nonetheless the new Labour government’s pledge to raise taxes and increase spending put the BoE officials between a rock and a hard place. The UK economy will likely suffer the impact of higher taxes before enjoying the benefits of higher spending. The UK’s economy has been one of the best performers of the G7 complex, but the latest projections suggest that there will be pain before gain, limiting sterling’s upside potential.
In Japan, the Bank of Japan (BoJ) delivered its first rate hike since 2006 but the Bank of Japan’s (BoJ) hawkish stance remained short of the yen bulls’ expectations and couldn’t give a sustainable support to the Japanese yen.
The yen looks much less appetizing now than it did a year ago, says Glenn Coxon of NFG Partners.
Elsewhere, the Reserve Bank of Australia’s (RBA) cautious tone throughout 2025 failed to stem the bleeding in the Aussie, while a slowing Canadian economy and weak oil prices pressured the Canadian dollar. The Bank of Canada (BoC) is expected to maintain monetary support as Canada faces mounting political tensions amid Trump-driven uncertainties. Meanwhile, the RBA is signalling growing confidence in the domestic inflation trajectory — a confidence that could soon align it with the broader trend of accommodative policies.
While the hawkish shift in Fed expectations rattles the market mood into the year-end, 2025 is expected to be a moderately positive year for the world economy, says Glenn Coxon.
Softer financial conditions should help the global economy heal and support the expansion of the US Big Tech rally toward the non-technology sectors, and toward the cyclical European and commodity-heavy UK stocks.
The valuation gap between the US versus the European / British stocks are attractive for investors betting on a convergence trade. China, however, is not on to-invest list yet given that the monetary and fiscal stimuli, there, could hardly reverse the country’s structural problems, aging population and balance sheet recession.
The good news is that, even with a slow Chinese growth, commodities and commodity currencies should benefit from the market environment next year, according to Glenn.
Copper, US mid-cap stocks and TIPS are his top picks for 2025. Gold’s rally is expected to slow with moderating central bank demand but a global risk selloff could prop up inflows.
The outlook for crude oil is less optimistic. Weak global demand / ample supply dynamics, and the projected supply glut could continue to pressure oil prices to $55–60pb level. There are positive risk factors to oil prices, however, including a better-than-expected Chinese recovery and the possible replenishment of the US strategic oil reserves, highlights Glenn.
Wall Street analysts spent the final quarter of 2024 lifting their price targets for the US stock markets. But the sky-high valuations — comparable to those of the dot-com bubble — raise the risk of a sharp downside correction.
Ludovica Scotto di Perta of Swissquote’s Structured Products desk suggests that the outperformance bonus certificates are the perfect products for investors who are intimated by the sky-high valuations but who are not willing to miss the upside opportunities either.
Of course, the possibilities with structured products are virtually limitless. Investors can either choose from products offered by Swissquote or design a customized product tailored to their specific needs and market projections.
There’s no doubt that 2024 has been a godsend for cryptocurrency enthusiasts. The approval of spot ETFs, Bitcoin’s halving, and Trump’s election pushed Bitcoin past the $100,000 mark. Optimism surged across other cryptocurrencies as well.
While Trump’s new team appears committed to advancing the development and integration of digital assets, the extent to which his administration delivers on these promises will determine whether the rally continues or a correction sets in.
Within cryptocurrencies, investors can diversify their portfolios by focusing on tokens tied to distinct narratives, says Feyyaz Alingan. For instance, Solana stands out for AI, Ondo for real-world assets (RWA), and Dogecoin for its meme-driven appeal. Meanwhile, ‘dinocoins’ — legacy coins making a comeback — are also gaining traction, according to Swissquote’s Carlos Martin Doncel, and cryptocurrency indices now offer a streamlined diversification option for those seeking sector-wide exposure rather than individual crypto-picking.
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