At the beginning of 2024, Swedbank’s strategists were optimistic about the stock market outlook for the year. The US economy was heading for a soft landing, while other parts of the global economy were expected to pick up pace with the help of interest rate cuts. The bank assessed that companies struggling with high interest rates would bounce back, and that there were opportunities for expansion in both the economy and the stock market.
However, looking back, chief strategist Mattias Isakson acknowledges that the forecast did not quite pan out as expected. While the US economy has pleasantly surprised, other markets have not performed as well. Isakson writes in a column on Swedbank’s Aktiellt site that “regardless of the market we look at, not all stocks have done well this year.”
Isakson believes that the “fragile dream scenario” envisioned by Swedbank for 2024 may now become a reality in 2025. He predicts that the interest rate cuts in Europe and Sweden will start to show in increased economic activity, especially in Sweden. He also suggests that China could recover with the help of stimulus measures.
The broad index of the Stockholm Stock Exchange has risen by approximately 6% in 2024, trailing behind several foreign stock markets, particularly the US, which is up by 27%. Isakson forecasts that Swedish stocks could make a comeback in 2025, supported by interest rate cuts and a stronger global economy.
“In 2025, we may receive support from current strengths while current weaknesses become stronger. This creates a good foundation for further gains, although perhaps with more winners than we saw in 2024,” he writes.
In conclusion, Swedbank’s outlook for the stock market in 2025 is one of cautious optimism, with hopes for a more robust recovery and growth in various markets. Isakson’s analysis provides valuable insights into the potential trends and opportunities that investors can expect in the coming year.