As one of his final reports for 2024, earlier this week DB's credit strategist Jim Reid published “Curveballs for 2025” (available to pro subs) which looks at potential realistic positive and negative surprises that could change the direction of travel for the global economy and markets in 2025.
Yesterday, Reid looked at one of the potential negative shocks and one of the most realistic - that we are in a US equity market bubble and it suddenly bursts. Today’s Chart of the Day taken from the Reid presentation, shows that US consumers have never felt so optimistic about gains in the stock market over the next 12 months, eclipsing anything we saw around the mega-rally in 2000.
As Reid warns, retail investors are often seen arriving late, and en masse, to speculative market moves and its likely that this latest meltup is such a period. Here Reid points out that the contrast to how optimistic they are about income gains is stark with by far the largest differential on record.
