“I’m Not Predicting, I’m Observing”
— George Soros
I was going to be really lazy this week and simply share our CIO Outlook 2025 with you, which we published last Friday. However, macro movements in financial markets this week have been too important to not share one or the other chart with you. And then I remembered that we also need to do our 2025 Outlook “Quiz”! In short, this week’s Quotedian, already second of the year, will not be short (pun intended).
So, shunning away from the usual format, we will have three sections to this week’s letter:
NPB CIO Outlook 2025
Update on recent market movements
2025 Market Poll
Off we go!
SECTION 1
Just before I share our 2025 outlook with you, keep Tim Harford’s, senior columnist at the Financial Times, recent words in mind:
“Thinking seriously about the future can be a worthwhile exercise, not because the future is knowable but because the process is likely to make us wiser.”
With that out of the way, click on the pictures below to access our CIO Outlook for 2025:
And here’s the link to the accompanying chartbook:
SECTION 2
Rarely have I seen a first full trading week of the year with such profoundly impacting macro and micro moves.
Exhibit 1
US Yields are sharply higher as inflation expectations have been increasing:
Exhibit 2
As we show in our 2025 Outlook, the recent yield rise in the longer-term context is nothing … so far:
Exhibit 3
Friday’s stronger-than-expected NFP number has only been the icing on the cake of a lot of signs of increasing inflation again, as the Citi Inflation Surprise index shows:
Exhibit 4
Really worrisome have been the movement on UK assets. The combination of rising yields and a falling Pound (and stocks) are signs of investors’ distress over the UK’s economic future:
Exhibit 5
The US Dollar’s rise should stop soon, or else financial distress will further contagion other asset classes:
Exhibit 6
Versus the Euro, the Greenback is closing in on parity:
Exhibit 7
Stocks, below the S&P 500, are suffering under rising yields:
Exhibit 8
Whilst the S&P 500 (above) is still within its uptrend channel, the equal-weight index is breaking down:
Exhibit 9
No wonder, as only about half of the index constituents remain above their 200-day moving average:
Exhibit 10
If you ever wished to have exposure to small cap stocks, it is now or never:
Section 3
Alright! On to discovering your forecasting capabilities. Here are ten “simple” questions to discover the best market seer! The winner takes it all!
Question 1
The best performing asset class in 2025 will be:
Question 2
The best performing equity market of the following in 2025 will be:
Question 3
The S&P 500 will end the year
Question 4
The EUR/USD will be by the end of the year 2025
Question 5
Of the following, the best performing equity factor will be
Question 6
At the end of 2025, the US 10-Year Treasury Yield will be
Question 7
At year end, Gold will trade
Question 8
At the end of 2025, Bitcoin will be
Question 9
During the year, crude oil (Brent) will
Question 10
By the end of the year, Elon Musk will
And that’s all for this week folks!
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Everything in this document is for educational purposes only (FEPO)
Nothing in this document should be considered investment advice
Investing real money can be costly; don’t do stupid shit
The views expressed in this document may differ from the views published by Neue Private Bank AG
Past performance is hopefully no indication of future performance