EBC Markets Briefing | Powell has not killed the bull market

US stocks plunged, with the Dow Jones hitting a record low. Many strategists see potential for further gains, while Tesla's stock hit a new high.

US stocks plummeted on Wednesday as the Fed signalled slower pace of rate cuts in the upcoming year. The Dow it was its tenth consecutive daily loss, marking its longest losing streak since 1974.

But the party may not be over. The mainstream view is that US stock market will end 2025 higher than its current levels, according to strategists who have listed 2025 year-end calls for the S&P 500.

Among them Oppenheimer chief investment strategist John Stoltzfus even initiated his target for the benchmark index above 7,100, citing the resilience in economic growth and current monetary policy.

He added that the broadening of the equity rally over the past year suggests that "the current bull market likely has legs strong enough to climb the proverbial 'wall of worry' into and through 2025."

RBC Capital Markets head of US equity strategy Lori Calvasina pointed out in her 2025 outlook why economic growth meeting or exceeding positive expectations could be crucial to the stock market rally.

Dating back to 1947, when GDP grew by 1.1% - 2%, stocks were higher just 40% in those years, with an average decline of 3.4%. When it was 2.1% - 3%, stocks were higher 70% of the time, rising nearly 11% on average.

Stifel chief investment strategist Barry Bannister – the only bearish one – warned that sticky inflation could prompt the Fed to hold interest rates for longer against the background of cooling economy.

Powell call

Interestingly, a Schwab’s report noted, multiples can continue to move higher and there is not a strong historical relationship between valuation and forward performance."

It is an encouraging observation for FOMO investors to buy at a time of market complacence.

The forward P/E on the S&P 500 is around 22 which has preceded positive annual returns numerous times.

During periods where earnings growth is above average and monetary policy is accommodative, history shows P/E ratios rarely fall. Corporate America is heightening that case.

The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base.

However, a loose monetary policy is not a given now. Officials’ projections for rates in 2025 pointed to fewer cuts than previously forecast on the ground of lingering price pressures.

They also raised that estimate for the neutral rate again, with a majority now putting it at 3%, up from the previous 2.5%. Higher interest rates usually bode ill for growth stocks.

Powell said that officials had begun to include in their forecasts assumptions about Trump’s planned policies. There is great uncertainty around how much inflation will be affected by fiscal stimulus and protectionism.

Tesla first

Tesla shares closed at an all-time high on Monday as the EV maker continues its relentless run higher since Trump’s victory. They are up more than roughly 80% this year.

Apart from Musk’s intimacy with the upcoming president, Tesla’s China unit said it sold 73,000 EVs on the mainland during in November, its highest monthly sales thus far in the year.

A Reuters report said Trump was considering to remove a NHTSA order requiring automakers to report crashes involving self-driving or autonomous driving systems – a boon for the company.

Earlier this month, analysts at Deutsche Bank, BofA, and Morgan Stanley all upped their price targets for it. Wedbush Securities predicted Tesla could hit $2 trillion in market cap by the end of 2025.

Trump’s plan to scrap the EV tax credit is misread by some investors as a blow to Tesla, but it actually is more likely to push out less cost-effective competitors out of the market.

Challenges come from China where local EV makers have launched a range of fully electric SUVs that are intended to take on the Model Y. They are also intensifying efforts in their own autonomous driving technology.

A blind spot is that Beijing could put Musk under pressures to lobby for lower US tariffs. If a decoupling between the two countries still accelerates, Tesla will have to address concerns from both sides.

EBC Financial Risk Management Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Financial News or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Regulation: FCA (UK), ASIC (Australia), CIMA (Cayman Islands)
read more
Gold Shines as Trade Tensions Rise

Gold Shines as Trade Tensions Rise

On July 14, global markets turned risk-off after President Trump revived tariff threats targeting the EU and Canada. Gold surged past $3,350 on safe-haven bids, while USD/CAD spiked near 1.3700. EUR/USD rebounded toward 1.1700, and NZD/USD slid below 0.6000 ahead of key Chinese trade data. GBP/USD remained pressured around 1.3500 amid Brexit silence.
Moneta Markets | 21 minutes ago
ATFX Market Outlook 14th July 2025 

ATFX Market Outlook 14th July 2025 

Trump issued a letter late on Thursday that said a 35% tariff rate on all imports from Canada would apply from August 1. Wall Street ended lower on Friday, with Meta Platforms weighing on the S&P 500 after President Donald Trump intensified his tariff offensive against Canada, amplifying the uncertainty swirling around U.S. trade policy.
ATFX | 2h 45min ago
ATFX Economic Calendar- 2025.07.14 - 2025.07.18

ATFX Economic Calendar- 2025.07.14 - 2025.07.18

The ATFX Weekly Economic Calendar is a comprehensive resource designed to help traders and investors stay ahead of market-moving events. It outlines key economic data releases, central bank meetings, speeches, and geopolitical events for the week. This calendar provides a strategic tool for navigating global markets, offering insights into potential volatility triggers across multiple asset.
ATFX | 3h 3min ago