For those who missed our January 2025 Economic and Market Update, below are key highlights as well as a link to our recorded presentation. As always, should you have any questions, please don't hesitate to reach out.Â
January 2025 Economic and Market Update Key Highlights
Economic Overview:
The U.S. economy showed strong growth in 2024, with an average GDP growth of 2.6% and Q4 expected at 2.5%.
Consumer spending remains robust, as shown by high retail sales and record airline travel.
Small business optimism is high, which is a positive indicator for future economic growth.
Market Performance:
The S&P 500 significantly outperformed Wall Street estimates in 2024
Risky asset classes across the board were positive during 2024.
Wall Street analysts expect around a 10% return in the S&P 500 for 2025.
Consumer Behavior:
Consumers continue to sit on significantly more cash than they did pre-COVID
Consumers are benefiting from low mortgage rates that were locked in during COVID, allowing for increased disposable income.
High consumer spending continues to drive strong economic growth.
Federal Reserve Actions:
The Fed has been adjusting interest rates lower in response to inflation and employment data.
While inflation is decreasing, it is doing so at a slow pace, with some deflationary pressures in energy and core goods.
The Fed is expected to make one to two interest rate cuts in the coming year, fewer than previously forecast a few months ago.
Investment Strategies:
Consider private credit as a potential for attractive returns with attractive risk profile and lower market correlation
It is important to stay invested and avoid market timing.
January is an excellent time to reassess and adjust portfolios for tax planning purposes.
For those who were unable to attend the economic update, you can access the recording via the following link:
Park City Wealth Advisors appreciate your continued trust and partnership. Please feel free to reach out with any questions or to discuss your investment strategy further.
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