2024 was a momentous year in the US.
There was rocketing inflation and interest rates but also record stock market returns. A total solar eclipse plunged a swathe of the nation into momentary darkness, and extreme weather raged from forest fires to droughts and deadly hurricanes.
There was a breakout moment for women’s sport with Caitlin Clark setting a point scoring record which earned her the honour of Time Magazine’s Athlete of the Year. The Kansas City Chiefs started the year with an NFL dominating performance in the Superbowl, before their star tight-end Travis Kelce made global headlines for dating America’s sweetheart, Taylor Swift.
Ms. Swift spent the year touring the globe as part of her $2billion ERA’s tour and cemented her place as the world’s biggest star.
And then there was the election. The sitting President abandoned his campaign over concerns about his mental acuity, his replacement struggled to make traction with voters on key issues, and for only the second time in the history of the nation a President was elected to serve a second non-concurrent term.
Donald Trump dominated the world of politics and business as he swept to election victory, surviving not one but two assassination attempts earning him the monic amongst his supporters of ‘Bulletproof’. In their eyes, their man is unstoppable, and Trump agrees.
He has wasted no time in shaking up the Washington orthodoxy with his selections for key roles in the administration, none less than his appointment of Elon Musk as a kind of Svengali-Rasputin figure who has even moved into the President-elect’s Florida home to be nearer to the ear of the incoming regime.
So, trying to predict what might happen in 2025 is a fool’s errand, but one I’m suitably qualified for so here goes.
In politics, Trump’s inauguration will be a moment which is broadcast around the world. Normally conducted with suitable chivalry and statesman-like conduct, all bets are off this time.
January 20th will see Trump move back squarely, front and centre of the American story and he will use the global stage and worldwide audience he is afforded to not only spell out his plan but to court acclaim. While this could be a moment to bring the nation, America’s many allies and global partners together around a clear and compelling vision for the western world and its sphere of influence, that isn’t how our Don rolls.
I expect Trump to use that platform to sabre rattle on the geo-political stage, warn those he sees as foes, rocking the gentle balance which has kept despots and theocrats with trembling trigger figures from pushing ‘the button’.
Trump enjoys the use of wild rhetoric. The 78-year old has a flair for the unscripted and unproven – his recent claim that America has been an ally of Italy since the days of Ancient Rome suggested his grasp on world history is, at best, flawed.
Trump may use his bully-pulpit to challenge China, Iran and other regimes he has beef with and his stated intention of adding tariffs to all global trade as a tool to exert pressure seems likely.
I think late January may be a defining moment in setting the course for the remainder of the year as politics influences business which then shapes politics again.
The stock market will be watching and listening carefully. Chief Executives have been flying down to Mar-a Largo on a frequent basis, writing personal checks towards the cost of the President’s inauguration party and trying to curry favour with the incoming President as much in hope of avoiding his wrath as gaining any notable advantage.
But if Trump uses tariffs as liberally as he suggested in the election campaign, the markets will react. If they see them, as I do, as inflationary – raising costs for businesses, pushing up prices and disrupting supply chains – then the macros will change.
The Federal Reserve led by Trump’s 2020 pick Jerome Powell will likely have to start pushing interest rates back up to dampen down inflation, and that typically hurts the stock market and job figures.
I do think there is still a lot of enthusiasm for Trump’s economic agenda around Wall Street and with the growing army of internet inspired, YouTube following retail investors. They see him as low regulation, America First, and pro-business and that should continue to be reflected in higher stock market valuations taking the main indices up to even higher stratospheric levels.
But what goes up must surely come down, and if the President, Elon Musk and a few other leading voices in the White House and across the West Wing spook that optimism too soon and too sharply, then the bubble will burst.
I’m clinging on to my stocks in the so-called magnificent seven for a few more weeks but find myself agreeing with a growing number of bear-market analysts who see the new year as the time to shift to assets which may offer greater stability, chasing profits rather than growth.
Timing the market is notoriously impossible, but if the market rushes for the exit door at the same time, fortunes will be lost much quicker than they were made.
And that will flash warning signs on Trump’s radar. Most commentators agree the health of the stock market will be one of the 47th President’s key metrics, and if wealth across the nation starts to contract, he will react.
His response will be to blame someone. He will look to replace administration officials, chairmen and women of committees and agencies. It will be their fault, and he will not hold back in telling us who to turn our anger on.
His other big political initiative is around immigration which is a cornerstone of his entire political existence – from name calling certain demographics, spreading false stories about pet eating communities, to the wall building endeavours of his first term in office.
Trump will round up any number of ‘illegals’ and make a great play on dumping them back on the other side of the Rio Grande. His supporters will cheer, human rights advocates will protest, and the division which runs through so much of the nation will be further inflamed.
Trump has the attributes of a good salesman, he can rally a crowd, but as President his dog-whistle claims have far-reaching consequences and outcomes in the communities where we live. It could get ugly very quickly.
But my biggest prediction for 2025 is a big divorce.
Like all celebrity love-ins they come under scrutiny and pressure, and with two big personalities fighting for the spotlight, the Trump/Musk bromance is no different.
Trump owns Truth Social his preferred social media mouthpiece.
Musk owns X, what used to be Twitter, and uses it to share his thoughts.
Since the election, both men have been prolific in their use of social media to share their opinions and reactions to evolving situations. But there appears to be little coordination or alignment in the messaging going out on the various platforms.
Earlier today, both men were typing out hundred-character posts about the potential Government Lockdown if Congress can’t raise the debt ceiling. Musk’s tweet that the Government’s plan is ‘a crime’ and that debt ceilings should be abolished, caused consternation in the markets, across the political establishment and in the corridors of Congress.
It seems like only a matter of time before Musk tweets something which either contradicts Trump, or rocks the market negatively, or is interpreted by politics and Washington-watchers as Musk usurping Trump as the real power behind the throne.
These would be behaviours which would severely impact the President and the First-Buddy’s relationship, and would likely see the exit of Musk from the inner circle.
But Trump should be careful, there is no scorn like a tech billionaire scorned.
And finally, sports.
Pennsylvania played a big role in the US election campaign, and I think it may feature in 2025’s sporting calendar too.
Derbies are a rare occurrence in American sports. While my hopes for a NY Subway Series in baseball earlier this year were quashed, I have had a light wager on the Keystone State providing the combatants for February’s Superbowl. If things on the grid iron map out as I hope, last year’s defeated finalists the Philadelphia Eagles may find themselves squaring up to inter-state rivals Pittsburgh Steelers.
There is a long way to go before the sides meet in New Orleans for the showdown, but that’s my first sports bet of the year. Here’s hoping.
Merry Christmas, Happy Holidays and a prosperous New Year to all in the Downtown in Business family as we look forward to an exciting and intriguing 2025.
