US Exceptionalism to Boost Stocks and Dollar in 2025 According to MLIV Pulse
A recent survey suggests US economic growth will favor stocks and the dollar, driven by anticipated policies from the Trump administration.
US, Stocks, Dollar, Trump, Economy
Bloomberg: So, it looks like US stocks and the dollar are set to thrive thanks to some economic growth, all thanks to Trump’s policies. That’s what a recent Bloomberg Markets Live Pulse survey is saying.
By the end of the year, a good chunk of folks—61% of 553 respondents—think the S&P 500 will rise because of strong economic and earnings growth in the US. Many are pointing to the incoming Trump administration as a key factor, especially after the Fed’s decision in December.
When asked about the dollar, opinions were split. About half believe Trump’s policies will help the dollar, mainly due to his tariff preferences. But 27% think those same policies could weaken it. It’s a bit of a mixed bag.
Timothy Graf from State Street Global Markets mentioned that these conflicting views could lead to some volatility in the stock market. He expects that as things heat up, stocks might not move in sync like they usually do.
Looking back, 2024 was a great year for the S&P 500, even with a little dip at the end. It hit 57 record closes, thanks to companies like Nvidia and Apple. The Bloomberg Dollar Spot Index also saw its biggest climb in nearly a decade, fueled by a US economy that surprised everyone by not slowing down.
Kit Juckes from Societe Generale noted that while the economy is doing well, he wonders if it’s sustainable. The dollar might stay strong as long as the US economy keeps growing and global savings flow into US markets, but that’s a big ask.
Now, let’s talk about consumers. There are signs of strain, especially among lower-income households. They might feel the pinch more if Trump’s tariffs lead to higher prices. State Street’s Noel Dixon pointed out that while stocks and the dollar could keep climbing, the bottom 40% of consumers are still under pressure.
Inflation is a concern too. That’s likely why 57% of survey respondents expect Treasury yields to rise as the year kicks off. The 10-year rate recently hit a seven-month high after the Fed hinted at fewer rate cuts this year, which got traders thinking about the possibility of only one reduction.
Graf believes that if the Fed stops cutting rates or even thinks about raising them, it could put a damper on those pricey stocks. It’s a tricky situation, and we’ll have to see how it all plays out.
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