Mackenzie Investments 2025 Market Outlook: Impact of New U.S. Administration
Today, Mackenzie Investments released its 2025 Market Outlook, providing insights and commentary for financial advisors and investors on the key trends impacting Canadian and global markets in the upcoming year. According to Mackenzie, 2025 presents both opportunities and challenges, with steady economic growth driven by inflation and lower interest rates across major developed economies. However, the outcome of the 2024 U.S. presidential election could have significant ramifications globally, affecting U.S. tariffs, tax rates, deregulation, and immigration policies.
Steve Locke, CIO of Fixed Income and Multi-Asset Strategies at Mackenzie Investments, pointed out that the new U.S. administration could lead to geopolitical risks, changes in trade flows, and affect various asset classes and sectors. This could create a growth advantage for the U.S., prompting Canada to potentially require larger rate cuts compared to other G7 countries, resulting in lower Canadian bond yields and a weaker Canadian dollar against the U.S.
Mackenzie’s 2025 Market Outlook highlights three key factors for investors to consider:
1. The Battle with Inflation Has Stabilized – For Now:
Inflation has been stabilized following efforts by central banks, creating a favorable landscape for equities and nuanced opportunities for bond investors in 2025. While corporate profits are expected to rise, investors should remain cautious of risks and potential volatility, particularly if new economic policies impact tariffs and onshoring.
2. Expect Policy Divergence from Central Banks:
Most central banks began lowering interest rates in 2024 after containing inflation, with Canadian and U.S. bond yields decreasing significantly. This trend is expected to continue in 2025, with Canadian and EU economies likely lowering policy rates more than the U.S.
3. Pockets of Value Remain in the U.S. Market:
While the U.S. economy has maintained double-digit earnings growth, Mackenzie’s report suggests that there are still attractive investment opportunities beyond mega-cap tech-focused stocks. By selecting carefully, investors may find value in the remaining S&P 493 stocks and small to mid-cap U.S. companies.
To learn more about Mackenzie Investments’ 2025 Market Outlook, including investible themes like Electrification, Resources, Quantitative Investing, and Private Markets, visit their website. Mackenzie Investments is a Canadian firm with a global presence, managing over $211.3 billion in assets as of October 31, 2024. As part of IGM Financial Inc., a leading wealth and asset management organization in Canada, Mackenzie aims to deliver strong investment performance and innovative portfolio solutions to clients worldwide.
