Jefferies in 2025: focus on positioning
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JEFFERIES IN 2025: FOCUS ON POSITIONING
Jefferies economists published their 2025 outlook on Wednesday, saying the coming year promises to be one of increased volatility.
With Trump set to take office in January, there's a significant amount of uncertainty on how aggressive his administration will be with its proposed policies, such as introduction of tariffs, fiscal spending and immigration reduction.
But, for 2025, Jefferies still sees the backdrop being broadly supportive for risky assets.
"An environment of economy doing fine and central bank cutting rates will likely be supportive," Jefferies economists Mohit Kumar and Modupe Adegbembo write, noting that they expect increasing divergence across geographies and sectors.
"In our view it's still a US vs Europe story with US exceptionalism to continue and Trump tariffs hurting European growth."
But, as European shares are more attractively valued, Jefferies thinks opportunites might present themselves later in the year.
"At some point, potentially around early Q2, when Trump tariffs will prove less onerous than feared, and we could be looking at more fiscal stimulus from Europe and China along with better geopolitics, we would look to overweight Europe," say Kumar and Adegbembo.
A final point made is to focus on positioning, which Jefferies believe is often more important than fundamentals.
"Almost every major turning point in the markets has been driven by positioning over the last few years," they say.
"Next year, with increased volatility, we expect the focus on positioning to become even more important."
(Samuel Indyk)
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