US stocks are on track to closing this year on record levels but the consensus among market experts is that the S&P 500 will climb further to over 6,600 level in 2025.

Much of the strength in the benchmark index this year has been related to the tech sector.

Still, Anthony Saglimbene recommends avoiding the broader information technology stocks in 2025.

Investing $10,000 selectively in three other areas, he’s convinced, could minimise risk and offer outsized returns to investors in the coming year.

Invest in software stocks for exposure to AI in 2025

Anthony Saglimbene is the chief market strategist of Ameriprise Financial.

He continues to see artificial intelligence driving significant upside in tech stocks next year.

Instead of investing in IT names, however, he recommends parking a part of the $10,000 in software stocks, particularly ones that have so far failed to keep pace with the AI leaders.

That’s because Statista forecasts the artificial intelligence market to grow at a compound annualised rate of more than 28% through the end of this decade.

So, it’s a big enough total addressable market for the laggards to finally pick up and start to benefit in 2025, according to Saglimbene.

Financials are positioned to outperform in 2025

The Ameriprise chief market strategist also recommends spending some of the $10,000 on financial stocks in 2025.

He expects this sector to rally on the back of strong earnings growth and more accommodative regulations under Donald Trump as the President of the United States.

Anthony Saglimbene is particularly bullish on capital markets focused names within financials.

“If we have lower regulation, more IPOs, and more M&A, then those investment banks will see their profits accelerate more than insurance companies or other financials that might not perform as well,” he told clients in a recent report.

IYF – the iShares US Financials ETF is currently up some 30% versus the start of 2024.  

Should you invest in bonds in 2025?

Anthony Saglimbene also recommends building a position in high-quality government as well as corporate bonds to benefit from attractive yields and diversify the investment portfolio in 2025.

In particular, he’s bullish on the five-to-seven year time frame.

For investors who prefer sticking to equities over bonds, the chief market strategist offered a 5% to 10% allocation to dividend stocks as an alternative in his research note.

“That would give you exposure to equities but do it in a less volatile, less risky way and add some income to the portfolio,” he added.

On the other hand, James Humphries of Mindset Wealth Management recommends investing about 10% of the capital in cryptocurrencies, preferrably in Bitcoin and Ethereum as well in 2025.

Bitcoin has already seen a 2.5x increase in its price this year.

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Following a robust Christmas Eve performance, the stock market experienced a subdued session on Thursday, as mixed jobless claims data provided little impetus for significant moves.

The S&P 500, while managing to claw back some of its earlier losses, struggled to gain meaningful traction, amidst light trading volume due to closures in major European markets.

This quiet session reflects a market taking a breather before the year’s end, with eyes now turning to the potential for volatility in the New Year.

Market focus turns to 2025

Wall Street largely shrugged off the latest economic readings, which included a rise in recurring applications for US unemployment benefits to a three-year high, indicating that it is taking longer for the unemployed to secure new jobs.

In contrast, initial claims for unemployment ticked down to 219,000 for the week ending December 21st.

Kenny Polcari at SlateStone Wealth told Bloomberg, “Eco data is a non-event until we move into the new year. Christmas is behind us, but the New Year is ahead of us. Volumes will remain muted.”

This sentiment underscores the market’s shift in focus from current economic data to future prospects and potential risks.

Year-end rally or January volatility?

While the market has been exhibiting strength, reaching new highs is a key point of discussion among analysts, who hold differing views on the market’s trajectory.

While Jonathan Krinsky at BTIG believes that the S&P 500 can continue to make upside progress into year-end and potentially reach a new all-time high above 6,100, he also anticipates that volatility will re-emerge in January.

Krinsky told Bloomberg, “If the S&P 500 does make new highs, there are going to be massive divergences in breadth and momentum, which is another red flag as we get into January.”

This observation suggests that the current rally might be masking underlying weaknesses in the market.

Megacaps mixed, GameStop surges: a look at market movers

The S&P 500 hovered near 6,035, while the Nasdaq 100 slid 0.1%, and the Dow Jones Industrial Average remained largely unchanged.

Most megacap stocks experienced a decline, except Apple Inc. which outperformed after a bullish note from Wedbush.

GameStop Corp., a meme-stock favorite, rallied after an X post from Keith Gill, also known as Roaring Kitty.

These movements reflect the ongoing dynamics within the market, highlighting both established players and those driven by retail interest.

Treasury yields dip, dollar rises, Bitcoin falls

The yield on 10-year Treasuries dipped two basis points to 4.57%.

Meanwhile, the Bloomberg Dollar Spot Index rose 0.1%.

In the cryptocurrency market, Bitcoin sank as traders reduced their risk exposure following a record-breaking run, reflecting the impact of the Fed’s cautious outlook on speculative investments.

Strategic moves and analyst upgrades

Alibaba Group Holding Ltd. announced an agreement to merge its South Korean operations with E-Mart Inc.’s e-commerce platform, aiming to improve their competitiveness in the country’s online retail sector.

Progressive Corp. was also upgraded to outperform from market perform at Raymond James, citing the company’s “long-term record of growth and value creation” as a solid rationale for it to be considered a core holding for large-cap growth investors.

Key events and market data:

Upcoming key events include Japan’s Tokyo CPI, unemployment, industrial production, and retail sales, along with US goods trade data, all scheduled for Friday.

In terms of specific market data, the S&P 500 remained largely unchanged, while the Nasdaq 100 fell 0.1%, and the Dow Jones Industrial Average remained similarly flat.

The Bloomberg Dollar Spot Index edged up 0.1%, while the euro remained steady at $1.0416.

The British pound fell 0.3% to $1.2521, while the Japanese yen fell 0.4% to 157.98 per dollar.

In the cryptocurrency market, Bitcoin fell 3.1% to $95,412.59, and Ether fell 4.2% to $3,318.68.

The yield on 10-year Treasuries declined two basis points to 4.57%, while the yield on Germany’s 10-year was unchanged at 2.32% and Britain’s 10-year was also unchanged at 4.58%.

West Texas Intermediate crude fell 0.9% to $69.44 a barrel, while spot gold rose 0.6% to $2,633.44 an ounce.

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Holiday retail sales in the United States in 2024 outpaced forecasts, with consumers flocking to last-minute online deals and convenient shopping options like curbside pickup and free delivery.

Despite inflationary pressures, total spending during the season from November 1 to December 24 grew by 3.8% over the previous year, surpassing the anticipated 3.2% increase.

US holiday retail sales 2024: online sales lead the way

According to Mastercard SpendingPulse, online sales surged 6.7% compared to 2023, significantly outpacing the 2.9% growth in in-store purchases.

Services like “buy online, pick up in-store” (BOPIS) and fast, free delivery played a critical role in driving e-commerce activity.

Salesforce data revealed that BOPIS orders doubled during the weekend before Christmas, making up nearly 40% of all online transactions.

Retailers like Walmart and Target capitalized on this trend, enhancing their digital platforms and advertising on TikTok and streaming services to engage tech-savvy shoppers.

Disciplined promotions, targeted strategies

Unlike previous years marked by deep discounts, retailers maintained a disciplined approach to promotions.

Companies like Walmart, Target, and Dollar General strategically reduced prices and increased advertising to remain competitive.

Target and Dollar Tree shares reflected these efforts, gaining nearly 3% during the peak shopping period.

Bernstein analysts noted that shoppers remained selective, focusing on needs-based purchases.

To entice cautious consumers, Walmart emphasized its rollback pricing, while Target intensified its promotional campaigns.

These strategies paid off, as the last five days of the holiday season accounted for 10% of all spending, highlighting a late surge in consumer activity.

US holiday retail sales 2024: popular categories

Laptops, TVs featuring new technology, and athleisure apparel were among the top-performing categories.

Jewelry and electronics also saw significant growth, with sales rising 4% and 3.7%, respectively, over 2023 levels, according to Mastercard.

Online sales of apparel grew 6.7%, far outpacing the 0.2% growth in physical stores.

Steve Sadove, senior adviser to Mastercard and former Saks CEO, told Reuters that consumer spending remained robust despite inflationary challenges.

“Promotions were controlled. Nothing was extra deep, and there were no panicked promotions. What we saw was real consumer strength,” Sadove was quoted as saying.

He credited low unemployment rates and higher wages for buffering personal finances during the holiday season.

With only 27 days between Thanksgiving and Christmas, five fewer than last year, retailers faced a condensed shopping season.

Many adjusted their strategies to attract shoppers, including increasing ad spend and emphasizing membership perks like quick delivery options.

Retail giants also leveraged lab-grown diamonds and innovative technology in products to appeal to value-driven consumers.

FedEx reported stronger-than-expected holiday delivery volumes, further reflecting the robust demand for online shopping.

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Dr Manmohan Singh, India’s 14th Prime Minister, passed away on Thursday, December 26, 2024, at the All India Institute of Medical Sciences (AIIMS) in Delhi. He was 92 years old.

A towering figure in India’s political and economic history, Singh’s life journey was one of remarkable intellect, dedication, and service.

Born on September 26, 1932, in Gah, a village in the Punjab province of undivided India (now in Pakistan), Singh rose from modest beginnings to leave an indelible mark on the world stage.

After completing his matriculation at Punjab University in 1948, he earned a bachelor’s degree in economics in 1952 and a master’s degree in 1954, both from Panjab University.

His academic brilliance won him a scholarship to the University of Cambridge, where he graduated with first-class honors in the Economic Tripos in 1957.

He later obtained a DPhil in economics from Nuffield College, Oxford, in 1962, with a dissertation critically examining India’s trade policies.

In this article, we detail how an atypical politician like Singh came to become one of India’s most consequential leaders.

Tributes pour in from around the world

From politicians to movie stars, people from around the world paid their respects to Singh.

Indian Prime Minister Narendra Modi expressed condolences, highlighting Singh’s journey from humble beginnings to becoming a respected economist, Finance Minister, and Prime Minister.

He praised Dr. Singh’s contributions to economic policy, his insightful parliamentary interventions, and his efforts to improve lives.

Former Maldivian President Abdulla Shahid and Former Afghan President Hamid Karzai also shared their condolences.

Gautam Adani, one of India’s richest men also paid his respects to the former prime minister.

Indian filmstars Kapil Sharma and Anupam Kher paid tributes to the leader. Kher played the role of Singh in a feature film on the former prime minister’s life.

Manmohan Singh: the advisor for all seasons

Manmohan Singh’s early years as an advisor in politics laid the foundation for his rise as one of India’s most consequential leaders.

His transition from academia to government in 1971 was prompted by his appointment as economic advisor to the commerce ministry.

This move marked the beginning of a remarkable career as a trusted technocrat.

Though his stint at the commerce ministry was brief, it was eventful—Singh even threatened to resign when his principles clashed with Commerce Minister LN Mishra.

Intervention by PN Haksar, then a key aide to Indira Gandhi, led to Singh’s promotion to chief economic advisor in the finance ministry.

From 1972 to 1980, Singh worked under four finance ministers—YB Chavan, C Subramaniam, HM Patel, and Charan Singh—through periods of economic and political turbulence.

As an economic advisor and later economic affairs secretary, he was pivotal in steering policies during Indira Gandhi’s shift toward socialism, including her controversial bank nationalization.

Singh’s integrity and intellect earned him bipartisan respect, helping him navigate politically charged periods like the Emergency and the Janata government’s tenure.

Despite being close to Indira Gandhi, he survived regime changes, thanks partly to his friendships with key leaders like HM Patel.

Singh stood firm against external pressures, opposing questionable decisions such as permitting the Bank of Credit and Commerce International (BCCI) to open a branch in India.

The beginning of the rise

In the politically fluid late 1980s, Singh briefly served as an economic advisor in the Prime Minister’s Office (PMO) during Chandra Shekhar’s tenure.

Despite offers from prestigious academic institutions, including the University of Delhi and Panjab University, Singh opted for public service.

However, as the Chandra Shekhar government neared its collapse, Singh transitioned to a safer role as Chairman of the University Grants Commission (UGC) in 1991.

The following months were marked by economic turmoil and political instability.

After the Congress emerged victorious in the 1991 general elections, PV Narasimha Rao became Prime Minister.

Few anticipated that Singh, a technocrat with no political base, would be entrusted with the crucial Finance Ministry portfolio.

Even Singh himself did not initially take the offer seriously, assuming it was an oversight.

He famously called himself the accidental finance minister.

The architect behind India’s economic reforms

Singh’s tenure as Finance Minister coincided with one of the most challenging periods in India’s economic history.

Amidst a balance of payments crisis, he introduced sweeping reforms that dismantled the Licence Raj and opened India’s economy to global markets.

Key measures included devaluing the Indian currency, liberalizing trade, and reducing industrial licensing restrictions.

Singh also reformed taxation, cutting personal income tax rates, slashing corporate tax, and reducing customs duties.

His innovative policies included introducing a presumptive tax for small businesses and laying the foundation for a service tax regime.

On fiscal discipline, he abolished ad hoc treasury bills, ensuring the government could no longer monetize deficits through RBI funding.

Despite these successes, his tenure was not without challenges. The 1992 securities scam briefly marred his reputation, prompting him to offer his resignation—a recurring theme in his career when faced with political pressure or setbacks.

Each time, Prime Minister Rao convinced him to stay, recognizing the importance of Singh’s leadership during turbulent times.

Singh’s tenure as Finance Minister was pivotal in shaping India’s economic trajectory.

Over five transformative years, he implemented liberalization reforms that stabilized the economy and laid the groundwork for sustained growth.

These measures cemented his legacy as a visionary leader in India’s modern economic and political history.

Manmohan Singh: India’s 14th prime minister

In May 2004, the Congress party’s victory in the general elections set the stage for a historic decision.

While Congress president Sonia Gandhi was widely expected to assume the role of prime minister, she chose to nominate Manmohan Singh to lead the Congress-led United Progressive Alliance (UPA) government.

Singh became India’s 14th prime minister, a position he held for a decade, becoming the first leader since Jawaharlal Nehru to serve two consecutive full terms.

Singh’s tenure as prime minister was closely scrutinized, particularly due to the unique power-sharing arrangement within the UPA, with Sonia Gandhi leading the coalition and Singh heading the government.

This dual structure often raised questions about decision-making authority, though Singh himself maintained that governance required a singular power center.

Initially, Singh expressed interest in retaining the finance ministry—a portfolio he had managed with unmatched success during India’s economic crisis. However, he ultimately appointed P. Chidambaram to the role, focusing his efforts on broader governance.

Singh’s prime ministership was marked by the rollout of rights-based policies, including the Right to Information (RTI), the Right to Education (RTE), and the National Rural Employment Guarantee Act (NREGA).

These initiatives underscored his commitment to social empowerment and inclusive development.

Economic growth during his first term benefited from the reforms of the past two decades, but the global financial crisis in 2008 presented a significant challenge.

Singh responded decisively, unveiling stimulus packages to revive the economy and approving a substantial ₹60,000 crore loan waiver for farmers. While this move drew criticism from economists, it reflected his emphasis on addressing rural distress.

A highlight of Singh’s first term was the Indo-US Civil Nuclear Agreement, a landmark deal that ended India’s nuclear isolation and redefined its strategic partnership with the United States.

Despite fierce political opposition, Singh’s steadfast commitment ensured the agreement’s success, cementing his reputation as a leader capable of taking bold political risks.

Singh’s second term was marked by economic challenges and political controversies.

The retrospective tax on foreign company transactions, known as the Vodafone tax, drew criticism from the industry and international investors.

Meanwhile, allegations of corruption, particularly in telecom spectrum and coal block allocations, marred the UPA government’s reputation.

Though Singh himself was not implicated, these controversies fueled accusations of policy paralysis and weakened public confidence.

Despite these setbacks, Singh’s tenure concluded with significant achievements alongside the challenges.

Manmohan Singh’s legacy

Manmohan Singh’s legacy stands as a testament to his intellect, integrity, and vision, defining him as one of India’s most transformative leaders.

As an economist, he steered the country out of its worst financial crisis, laying the foundation for liberalization that propelled decades of growth.

As a reformer, his policies reshaped India’s economic landscape, balancing bold initiatives with an acute understanding of political realities.

As a leader, he upheld the values of pragmatism and humility, navigating challenges with quiet resolve and a steadfast commitment to the nation’s progress.

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South Korea’s parliament has impeached acting President Han Duck-soo, deepening the nation’s political uncertainty as suspended President Yoon Suk Yeol faces trial over his controversial imposition of martial law.

The impeachment motion passed on Friday with 192 out of 300 votes, triggering a leadership shake-up and leaving Finance Minister Choi Sang-mok to assume the acting presidency.

The dramatic vote comes in the wake of public outcry and political strife sparked by Yoon’s December 3 declaration of martial law, which led to his own impeachment on December 14.

Opposition parties, led by the Democratic Party, accused Han of failing to act in the nation’s best interests and obstructing the appointment of justices to the Constitutional Court, a move seen as critical to the nation’s governance during this crisis.

Han’s actions amounted to ‘insurrection’?

The Democratic Party, which holds a parliamentary majority, spearheaded the motion against Han, arguing that his actions amounted to “insurrection.”

Opposition leader Lee Jae-myung called for swift action to restore public trust and stability, citing overwhelming public support for Yoon’s removal following his martial law decision.

“The only way to normalize the country is to root out all insurrection forces,” Lee declared in a heated address before the vote.

Despite strong objections from the ruling People Power Party, the impeachment motion passed amid chaotic scenes in parliament, with lawmakers clashing over the validity of the vote.

Han, who had served as acting president since Yoon’s suspension, stated he would step down to prevent further instability and await the Constitutional Court’s ruling on his impeachment.

Choi Sang-mok steps into acting presidency role

Finance Minister Choi Sang-mok has stepped into the acting presidency role, inheriting a challenging economic and political environment.

Prior to the vote, Choi warned parliament against impeaching Han, citing potential harm to South Korea’s economy.

The South Korean won fell to 1,475.4 per dollar, declining 0.53% following news of the impeachment.

The uncertainty surrounding the leadership crisis has raised concerns among investors, with analysts closely monitoring the Constitutional Court’s proceedings.

The court now has 180 days to decide whether to uphold or overturn the impeachment of Yoon and Han, a ruling that could reshape South Korea’s political landscape.

Constitutional Court’s role in the crisis

As the court convened for its first hearing on Yoon’s impeachment, questions loomed over the broader implications of the crisis.

Han’s impeachment marked an unprecedented move, as lawmakers debated whether a simple majority or a two-thirds vote was required to remove an acting president.

Speaker Woo Won-shik clarified that a simple majority was sufficient, paving the way for the motion to pass.

The ongoing trial of Yoon and the leadership vacuum created by Han’s removal have left South Korea at a political crossroads.

Observers note that the Constitutional Court’s decision will not only determine the fate of the country’s leadership but also set a precedent for addressing future political crises.

As South Korea navigates this turbulent chapter, both its political and economic stability hang in the balance, with domestic and international stakeholders watching closely for signs of resolution.

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