With a leading U.S. economy, WFII believes stock rally will
broaden, long-term yields will rise, the commodities bull-cycle
will resume, and alternatives will shift for recovery
Wells Fargo Investment Institute (WFII) today released its “2025
Outlook: Charting the Economy’s Next Chapter.” WFII’s global
economic outlook is that the U.S. economy’s continued expansion
will lead the world economy. As well, the U.S. stock market rally
will broaden, with earnings being the primary driver of prices
across equity asset classes.
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Wells Fargo Investment Institute 2025
Outlook: Charting the economy's next Chapter (Photo: Wells
Fargo)
WFII expects equity market leadership breadth to continue to
widen, including extended participation by more cyclically oriented
areas of the market, such as small-cap equities and the Financials,
Communication Services, Industrials, and Energy sectors of the
S&P 500 Index.
“We continue to believe that equity markets look attractive for
2025, with broader sector leadership and participation, thanks to
improving fundamentals and a policy tailwind,” said Darrell Cronk,
chief investment officer for Wells Fargo Wealth & Investment
Management. “The incoming administration and congressional leaders
want a fast start, with likely policy priorities including
extending tax benefits, deregulation, tariffs, and tighter border
control. We expect that these policies will support our
guidance.”
Outlook on global economy and asset groups:
- Global economy: We believe the U.S. economy will lead the
global economy, as economic recoveries in Europe, China, and
emerging markets face significant headwinds.
- Global equities: We expect returns to be driven mainly by
earnings growth, but valuations should remain supportive.
- Global fixed income: Short-term U.S. Treasury rates likely will
fall with the Federal Reserve policy rate, but longer-term rates
should rise with economic growth, tariffs, and immigration
restrictions.
- Global real assets: We believe commodities are well-positioned
to benefit from slow supply growth and a global demand rebound that
is driven by a modest international economic recovery and lower
global interest rates.
- Global alternative investments: Global alternative investments
are likely to benefit from a pickup in merger and acquisition
activity, lower cost of borrowing, and increasing confidence that
economic growth is sustainable.
Top portfolio ideas:
- Prepare for abundant liquidity to diversify investment
opportunities
- Position for a cyclical recovery but remain tilted toward U.S.
assets
- Rethink investment income
- Consider expanding opportunities in artificial
intelligence
- Keep extreme risks in perspective
Highlights of WFII’s forecast:
- The anticipated U.S. GDP (gross domestic product) growth target
for 2025 year-end is 2.5%.
- The target for U.S. consumer price inflation in 2025 is
3.3%.
- The S&P 500 Index price target range is 6,500 – 6,700 for
year-end 2025.
- The Federal funds rate forecast for 2025 is 4.00% – 4.25%, with
10- and 30-year U.S. Treasury yield forecasts of 4.50%-5.00% and
4.75%-5.25%, respectively.
The full report provides guidance for investors to help navigate
the next 12 months, long-term themes that WFII believes are
investable now, a closer look on sector and sub-sector preferences,
as well as U.S. and international political risks that could impact
investment returns. Please see the full report for detailed
information.
Join the WFII 2025 Outlook call today, December 11, at 4:15 p.m.
Eastern Time. Dial-in: 877-601-6604; Passcode: 71-306-44.
A summary of the WFII 2025 Outlook is available (PDF).
Investment and Insurance Products
are:
• Not Insured by the FDIC or Any
Federal Government Agency
• Not a Deposit or Other Obligation of,
or Guaranteed by, the Bank or Any Bank Affiliate
• Subject to Investment Risks,
Including Possible Loss of the Principal Amount Invested
Risk Disclosure Forecasts and targets are based on
certain assumptions and on our current views of market and economic
conditions, which are subject to change.
All investing involves risks, including the possible loss of
principal. There can be no assurance that any investment strategy
will be successful and meet its investment objectives. Investments
fluctuate with changes in market and economic conditions and in
different environments due to numerous factors, some of which may
be unpredictable. Asset allocation and diversification do not
guarantee investment returns or eliminate risk of loss.
Stock markets, especially foreign markets, are volatile. A
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industry sectors. International investing has additional risks
including those associated with currency fluctuation, political and
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result in greater share price volatility. These risks are
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risks. Bond prices fluctuate inversely to changes in interest
rates. Therefore, a general rise in interest rates can result in a
decline in the bond’s price.
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recommendation to buy, hold, or sell securities. Do not use this
report as the primary basis for investment decisions. Consider all
relevant information, including your existing portfolio, investment
objectives, risk tolerance, liquidity needs, and investment time
horizon.
About Wells Fargo Investment Institute
Wells Fargo Investment Institute, Inc. is a registered
investment adviser and wholly owned subsidiary of Wells Fargo Bank,
N.A., a bank affiliate of Wells Fargo & Company.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial
services company that has approximately $1.9 trillion in assets. We
provide a diversified set of banking, investment and mortgage
products and services, as well as consumer and commercial finance,
through our four reportable operating segments: Consumer Banking
and Lending, Commercial Banking, Corporate and Investment Banking,
and Wealth & Investment Management. Wells Fargo ranked No. 34
on Fortune’s 2024 rankings of America’s largest corporations. In
the communities we serve, the company focuses its social impact on
building a sustainable, inclusive future for all by supporting
housing affordability, small business growth, financial health, and
a low-carbon economy. News, insights, and perspectives from Wells
Fargo are also available at Wells Fargo Stories.
Additional information may be found at
https://www.wellsfargo.com/ LinkedIn:
https://www.linkedin.com/company/wellsfargo
PM-06042026-7408492.1.1
News Release Category: WF-ERS
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version on businesswire.com: https://www.businesswire.com/news/home/20241211401607/en/
Media Sarah Kerr, 917-588-5919
sarah.kerr@wellsfargo.com
Wells Fargo (NYSE:WFC)
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