Citigroup Forecasts Global Equities Rally to Extend Into 2025

Citigroup anticipates a continued rally in global equities through 2025, driven by lower interest rates and decreased inflation. The MSCI All Country World Index Local could reach 1,140 points, with expected U.S. and emerging market EPS growth of 15%. Uncertainty surrounds Trump's policies on tariffs and deregulation.

Citigroup announced its forecast for a prolonged global equity rally lasting until 2025, attributing this to decreased interest rates and inflation. The firm predicts that the MSCI All Country World Index Local, a major world stock benchmark, will climb to 1,140 points by the year's end, signaling a 10% rise from its previous close of 1,035.46.

The brokerage expects global equities' earnings-per-share to grow by 10%, slightly under analysts' predictions of 13%, with the U.S. and emerging markets poised for the most robust growth at around 15%. Citigroup remains 'overweight' on U.S. equities but notes potential complexities from President-elect Donald Trump's policies, which might introduce a blend of advantageous and challenging economic impacts due to tariffs, tax cuts, and deregulation.

The S&P 500's 24% surge in 2024 was driven by optimism around artificial intelligence, anticipated rate cuts by the Federal Reserve, and probable deregulation under the Trump administration. Citi analysts caution that while AI may no longer drive notable EPS growth compared to the rest of the index, sustained U.S. dollar strength and tariff policy uncertainties could sustain its market performance.

(With inputs from agencies.)