Predictions 2025

Risk and resilience are the watchwords for 2025

6 Jan 2025

In the past five years, the world economy has weathered disease and war. As Donald Trump prepares to take office again, the range of possible outcomes is wider than ever. Hefty sovereign debts and pumped-up stocks depend on the planet once again coping with fresh shocks.

Tech will learn the value of a cash paycheck

3 Jan 2025

Over decades, software firms have increasingly favored issuing shares to recruit and retain workers. Such stock-based pay at public companies has reached $270 bln, just as valuations are under pressure and layoffs are rising. In 2025, tech will begin to break its equity habit.

Politicians will hinder central banks’ easing plan

3 Jan 2025

Economies are growing and inflation is falling globally. It’s an ideal environment for central bankers to lower rates. Yet governments are loath to cut debt, which hit 93% of GDP in 2024. Without fiscal restraint, monetary policy’s path will be bumpy, as will financial markets.

Moutai will raise a glass to its LVMH moment

2 Jan 2025

China’s $260 bln liquor giant wants to appeal to young shoppers. A tie-up with local sportswear retailer Li Ning can be the answer. Moutai’s $25 bln cash pile and the potential target’s beaten-down valuation offer a tantalising opportunity to create a national consumer champion.

AI will become a Madison Avenue sensation in 2025

2 Jan 2025

Google and Facebook leveraged hefty brand-building budgets. Netflix and Amazon are also now running more commercials. Machine-learning business models will be similarly built. The cutthroat battle for a $900 bln bonanza, per Breakingviews calculations, is about to kick off.

Trading disruptors will mimic banks and beat them

2 Jan 2025

Market-makers like Citadel and Jane Street have mostly focused on low-margin business that JPMorgan, Citi and peers are happy to lose. In 2025, they’ll dabble in more lucrative trades and steal large clients. Wall Street’s grip on the $150 bln global-markets pie will slip.

Debt brake release will pull Germany out of slump

30 Dec 2024

Conservative leader Friedrich Merz will win the general elections. The new chancellor will try to relax Berlin’s fiscal orthodoxy to fund much-needed public investments. Backed by his Social Democrat allies in a new Grand Coalition, he has a chance to jump-start the economy.

Smart glasses give tech giants dangerous FOMO

30 Dec 2024

Sales of Meta’s $300 Ray-Bans that let wearers snap pictures and talk to a virtual assistant have topped 1 mln shipments. Advances in AI, chips and software mean rivals from Amazon to Baidu will roll out high-tech specs too. But all will struggle to catch sight of profit.

Art of the 2025 deal will be postBidenism

30 Dec 2024

A new US president probably means laxer trustbusters, adding fuel to lower borrowing costs and corporate quests for growth. Exxon, Comcast, Rivian and Google are primed to dust off older M&A plans or craft new ones. Even the White House is positioned to orchestrate a merger.

Insurance risks will be a proxy carbon tax

27 Dec 2024

Governments have failed to introduce a global levy to bring down fossil fuel emissions. But climate change is increasingly forcing up the cost of living. With insurance becoming more expensive and scarcer, the risk is that carbon pricing happens – but in a highly regressive way.

Tokyo’s property boom looks built to last

27 Dec 2024

Office vacancy rates in the city are around 3%, well below London and New York, and hotel occupancy rates are high. Transaction volumes will remain robust through 2025 as private equity and sovereign funds descend on Japan. That should keep the hot market from overheating.

Buyout barons will find ways to douse fire sale

27 Dec 2024

Groups like KKR and EQT have $3 trln of assets, after years of slow sales. In 2025, pressure to offload companies will grow, putting paper valuations at risk. To soften the blow, firms will rely on innovative disposal tricks, like continuation funds and private share placements.

SpaceX will be a better $1 trln bet than Tesla

26 Dec 2024

The satellite network is a nascent monopoly, more useful and harder to dislodge every day. As at his car company, boss Elon Musk is chasing growth through maniacal cost-cutting. Thing is, that works better in space. Expect SpaceX and Tesla’s relative valuations to prove it.

Credit markets’ calm veneer will crack

26 Dec 2024

Rates are falling, and so too are corporate defaults. Yet firms like Altice France, with $25 bln of borrowings, will still have to grapple with high funding costs. Losses on opaque private-credit loans will mount. Wafer-thin returns for risky debt leave little room for error.

India’s green power producers will get a shakeout

24 Dec 2024

More than a dozen renewable energy assets are on the block as both private equity firms like Brookfield and GIC and industry owners like Siemens look for an exit. Rivals and flush public markets will welcome large players. Smaller ones will have fewer options.

Insurers will stake their claim in private credit

24 Dec 2024

Buyout giants like Apollo and KKR have grabbed hold of an industry dragged down by dire valuations and aged policy books and used it to crack open a $34 trln credit market. As private lenders consolidate, insurers will flip the script by making their own acquisitions in 2025.

Trump and Tesla will turbocharge self-driving race

23 Dec 2024

The incoming president could speed up the development of autonomous driving tech in the US. Elon Musk’s marque is poised to reap the rewards in what could be a $400 bln global market. Stragglers, like China’s BYD, will have to play catchup with a flurry of deals and partnerships.

China will wield big mop to clean up property mess

23 Dec 2024

A $13 trln real estate glut is undermining President Xi Jinping’s efforts to stimulate the world’s second-largest economy. Shifting millions of empty homes into a ‘bad bank’ before turning them into affordable housing would help stabilise prices and restore consumer confidence.

Chinese investment banking will roar back in 2025

20 Dec 2024

In 2024 regulators throttled share sales they feared would worsen a stock rout, triggering a 90% drop in IPO fundraising from a peak in 2021. With markets stabilising, Beijing can open the taps, end the deals drought and get capital to growth-focused firms.

California will put secession back on the map

20 Dec 2024

Independence movements from Canada to Scotland have quieted, but Donald Trump’s return is bound to rile Golden State voters. A $4 trln economy bigger than India’s means separation would be messy. Divergent agendas and supportive polls, however, make a plebiscite hard to avoid.