TESL - Inflection Points: 5 Risks For 2025 Keeping Us Awake

2025-01-16 09:25:00 ET

Summary

• While we remain optimistic about the U.S. economy given the possibility of policies that help support a manufacturing recovery and small-cap business investment, a new policy regime brings important risks to consider.
• The use of satellites for targeting and force positioning in Ukraine illustrates the military importance of space capabilities.
• Successful stimulus is usually positive for domestic and global economies, so the stimulus that China announced in late 2024 being a risk does seem contrarian.
• The potential impact of AI on business profitability and efficiency is an important part of our positive view for market valuations and fundamentals going into next year.

This piece has become an annual tradition for me since returning to finance after working as a professor with the Department of Defense. The goal is not to predict events but to identify risks that financial markets may not be pricing though could unfold, compiled after consultation with colleagues, policymakers, investors, and academics. ...

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