Tuesday Target | 1/52
S&P 500: Forget the 2025 Target
Do we want to guess where the S&P 500 will be in twelve months, like a 2025 target price? Yeah, no. It’s one of the most absurd exercises out there, but banks and brokers keep doing it because there’s demand for financial clairvoyance. That doesn’t make them foolish—it just means plenty of people are eager to hitch a ride on random, inaccurate estimates, hoping for labor-free returns. Maximum laziness.
If you’re skimming Tuesday Target, you already know we’re about relevance—no witchcraft, just a sharp finger on the market’s pulse and practical tools to beat it, week by week, month by month. That’s our kind of 2025 target.
To cut through the noise, here’s the minimum you need to know to get a clear view of what’s cooking in 2025:
Global Trade War Fears on the Rise
According to a recent Deutsche Bank survey, a global trade war is seen as the biggest observable risk for 2025. While there's optimism about U.S. growth (averaging 2.5%), far more participants worry about increased tariffs under Trump's new term. Even then, only 6.4% expect him to go more extreme than his campaign promises - suggesting that trade concerns may have limits, but caution is warranted.
Government Debt: The Potential Crisis Spark
Daniel Lacalle warns that ballooning government debt - treated as a risk-free asset - could trigger the next financial crisis if the value of government bonds collapses. Once considered safe, these holdings dominate bank balance sheets and depend on investor confidence. Persistent inflation, supply expansions and doubts about deficit control all increase the risk of a bond market shakeout.
Divergent Outlooks on Inflation & Yields
While the consensus is for Treasury yields to be around 4.2% by the end of 2025, only 4% believe yields will exceed 5%, according to the Deutsche survey. Meanwhile, half of the respondents see German 10yr yields below 2%. Add to this the possibility of a Fed pivot to cut rates (as per various Goldman notes) to contain fiscal pressures, and bond markets could see heightened sensitivity.
Mega Cap Tech’s Ongoing Dominance?
A Goldman Trader review shows that mega-cap tech is up again in 2024-NDX +26%, Magnificent Seven up 48%. But a separate note from the derivatives desk warns of narrower breadth and less speculative call buying, suggesting caution. Bubble risks remain, with some worried that bitcoin and certain tech giants could halve rather than double.
Disorder, Not Chaos, for 2025
While some are predicting chaos, the reality may be more like disorder. Recent commentary from traders underscores that policy changes, interest rate uncertainty, and geopolitical tensions could lead to bumpy markets. Still, pockets of opportunity - from AI-driven equity plays to short-dated options strategies - remain in play.
Get Rich Overnight with Options? Yeah Right...
TUESDAY TARGET: So, there it is - a temporary S&P 500 target. Who would have thought… A hedge, a bearish directional play, or a risk-return of 1 to 2.2x? When in doubt, all of the above, every single time.
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Please note, all content is for educational purposes and isn't personalized for individual portfolios or financial advice. Curious about putting any of these ideas into action? Juri von Randow is here to offer guidance or connect you with the right resources.