Neuberger Outlook | Five Major Shifts Signal Market Regime Change
- Editor
- Dec 28, 2024
- 1 min read
What's new: Neuberger Berman's investment leaders see 5 major shifts coming in 2025 — more M&A activity, broader market participation beyond tech giants, shifting bond market dynamics, resurgent U.S. growth potential, and continued evolution in private markets.
Why it matters: The combination of pro-growth policies, potential tax cuts, and deregulation could drive above-trend U.S. GDP growth while keeping inflation contained - creating what analysts call a "Goldilocks" scenario that reshapes investment opportunities across assets.
Big Picture Drivers:
Dramatic shift in anti-trust stance could unleash the biggest M&A wave since 2021, especially benefiting private markets
Bond investors pivoting from inflation-watching to fiscal policy implications as Fed settles into neutral stance
Industrial policy momentum continues with focus on domestic manufacturing and supply chain resilience
By the Numbers:
Fed terminal rate forecast: 4% by early 2025
Market breadth explosion: 28 S&P 500 industries now outperforming vs. just 17 in 2023
Deal-making surge: Private equity secondaries hitting record volumes in 2024
Key Trends to Watch:
Capital rotation from mega-cap tech to financials, industrials, and small caps
Bond market volatility shifting to long end of curve as deficit focus intensifies
Private market players increasingly tapping secondary sales for liquidity
The bottom line: Markets are moving from "The Magnificent Seven" era into a new regime. A policy shift in 2025 could spur a major market rotation, with smaller companies, value stocks, and private markets poised to benefit as fiscal policy — not Fed policy — takes center stage.
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