Five things to watch in what could be a wild 2025

John J. Hardy, chief macro strategist, and Ole S. Hansen, head of commodity strategy, discuss what’s in store for 2025 – a year that’s already shaping up to become interesting. “Stay flexible. Don’t assume you have the answers. The big questions are what matter most, and 2025 will bring plenty of them, ” says John Hardy.

Markets at a pivot point

Increasing market divergence is a key concern, says John Hardy: “AI and tech stocks are booming, while broader indices like the Dow and S&P 500 are showing caution. When sectors diverge like this, it’s often a sign that volatility is building.” Investors should be aware of sharp shifts as markets enter 2025 on uneven ground.

Politics will dominate

John Hardy sees Trump’s return as a game-changer for global trade: “Tariffs aimed at bringing manufacturing back to the US could trigger inflation.” Trump’s focus on reducing inflation presents a contradiction that may disrupt markets at the same time.

For Europe, Ole Hansen highlights Germany’s critical need to adapt: “They’ve lost cheap Russian energy and are facing pressure from China in key industries like autos. They must invest to rebuild its economic model. The potential is there—political will is the question.” China remains a wildcard. John Hardy: “They’re trying to export their way out of domestic troubles, but that will clash with Trump’s trade policies.”

Commodities in focus

Ole Hansen sees commodities as a potential bright spot in 2025, driven by inflation fears and supply constraints: “Tangible assets like gold are attractive when inflation and debt loom large.” Electrification will continue to drive metals demand, especially for copper and aluminium: “As AI and tech require more power, the need for these metals will grow,” Hansen says. He also flags food markets as vulnerable: “Volatile weather is a major risk. Look at cocoa and coffee this year—this theme isn’t going away.”

Inflation and growth concerns

John Hardy highlights contradictions in US fiscal policy: “Trump wants growth, tax cuts, and deficit reduction—but something’s got to give.” Tariffs and labour restrictions could also drive inflation: “If immigration is curbed, labour costs could soar, adding more pressure,” says John Hardy.

Opportunities amid uncertainty

Despite the risks, John Hardy remains optimistic: “We’re entering a new era. Old economic models are breaking, but that creates opportunities. It’s going to be fascinating to see how countries adapt.” Ole Hansen ads that Germany and Europe have the potential to turn things around if they embrace change: “The resources are there—it’s about political will.”