06 February 2025
New Era
In January 2025, the global equity markets witnessed notable volatility driven by various economic developments and the evolving political climate in the United States, particularly after Donald Trump’s inauguration as President. US CPI data for December 2024 rose of 2.9% yoy, higher than prior but aligned with expectation, while core inflation recorded a slight decline. These mixed signals have reinforced market expectations for the Federal Reserve’s monetary policy, in which interest rates may remain the same in the short term amid persistent inflation concerns.
Donald Trump’s return to the presidency has introduced significant uncertainty into financial markets. His administration’s possible emphasis on tax reductions and deregulation could boost growth in specific sectors; however, a firm stance on tariffs and immigration might heighten market volatility and investor caution. The potential impacts of these policies are anticipated to unfold over the course of 2025, shaping economic outcomes and market sentiment. The narrative of “US exceptionalism” continues to influence global market perceptions. Despite headwinds such as high equity valuations and inflationary pressures, the US economy has demonstrated resiliency, reflected in low unemployment rates and strong corporate earnings.
The World Economic Forum’s Chief Economists Outlook underscores increasing global fragmentation in trade and labor markets, with US policy likely to play a pivotal role in shaping worldwide economic trajectories. While inflation shows signs of easing in many countries, heightened uncertainty dampens global growth prospects.
The S&P 500 has experienced fluctuations but remains under pressure due to AI development in China, elevated Treasury yields and concerns over future monetary policy tightening. The global equity market is responding to a combination of US economic data and geopolitical tensions. Emerging markets are particularly vulnerable to changes in US policies and dollar strength, facing additional pressures from trade restrictions and domestic economic challenges. In conclusion, January 2025 presents a complex environment for equity markets, shaped by critical economic indicators, US political dynamics, and broader global trends. Investors are advised to stay vigilant as these factors continue to evolve throughout the month.
Product Recommendation
| EQUITY FUND | |
|---|---|
| MGSED A | MGSED invests in Sharia-compliant Equities Abroad listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| MASED A | MASED invests in Sharia-compliant Equities in Asia listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
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DISCLAIMER
The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.
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