As the year draws to a close, the capital markets are caught between moderate economic adjustments, persistently high interest rates and geopolitical uncertainties. After the first three quarters of the year were characterized by the surprising resilience of the global economy, the central question is now coming into focus: Where are the markets heading in 2025?

Inflation continues to set the pace. After years of historically high inflation rates, the first signs of an easing of inflation are emerging in the USA and the eurozone. However, the underlying core inflation, which remains particularly noticeable in the service sector as well as in rents and wages, is stubbornly persistent. The persistently strong price pressure in these areas harbors long-term inflation risks. Even if initial progress in curbing these inflation-driven factors is becoming visible, it remains to be seen whether we can really expect a noticeable easing of monetary policy in the coming months.

In the US, the macroeconomic environment is comparatively robust, with the labor market in particular remaining a solid foundation. However, rising financing costs and declining consumer behavior are clearly leaving their mark on the growth picture.

The situation in Europe is far more difficult. Germany, the engine of the eurozone, is facing increasing structural problems. A slowdown in demand, the weakening automotive industry and a generally depressed industrial sector are putting noticeable pressure on growth. The automotive industry has been particularly hard hit, not only because it is struggling with the consequences of the energy crisis, but also due to the fundamental shift towards more environmentally friendly production and the challenge of keeping up with the technological leadership of other countries. Geopolitical tensions - such as the growing trade conflict with China and uncertainties in other parts of the world - are also exerting additional pressure.

Against this backdrop, investors continue to find it difficult to anticipate short-term market recoveries. In the past, economic momentum has often benefited from a positive feedback loop to corporate profits. However, there is currently a lack of solid growth drivers that could support these developments. In this mixed situation, a new bullish market does not seem immediately likely.

However, the real question is not whether the markets will reach new highs in the short term - this idea is increasingly receding into the background. Rather, it is about long-term resilience and the ability to manage risks intelligently and not be tempted into hectic movements by fluctuating market developments. Vigilance, without falling into a hectic pace, will remain a virtue in 2025.

Capital market outlook