In today’s briefing:
- Global Credit Outlook Gets More Complex Due to Recent US Developments
- Two Key Risks to the Bull That No One Is Talking About
- Tips on Navigating the Post-Inauguration Rally
- Antofagasta (ANTO LN) Updates: Good Set Up For 2025
Global Credit Outlook Gets More Complex Due to Recent US Developments
- Credit cycles and financial conditions could vary significantly by sector and region during 2025. Hawkish Fed policy and European political uncertainty complicate the credit outlooks for the US and Europe.
- Emerging market growth and credit outlooks could be impacted by US protectionism and more hawkish Fed policy conduct. Corporate and household credit trends are very mixed by individual markets.
- Upbeat US corporate sentiment since the election suggests greater appetite for leverage. Returning fiscal rules within the European Union could be the biggest driver of credit trends in the region.
Two Key Risks to the Bull That No One Is Talking About
- Nascent signs of a major market top are appearing even as the S&P 500 tests its all-time high.
- A growing negative breadth divergence and a potential growth shock of mass deportations could sideswipe stock prices.
- The scenario of a major market top in Q1 or Q2 2025 is building. The caveat is these are very early signs of risk.
Tips on Navigating the Post-Inauguration Rally
- The S&P 500 is short-term overbought after breaking out to an all-time high and needs time to digest its gains.
- We expect this will resolve in a period of sideways consolidation or shallow pullback, though Q4 earnings season and the FOMC and ECB rate decisions could induce volatility.
- However, we have substantial concerns over growing signs of negative breadth divergences, which could be signals of a cycle top in either Q1 or Q2.
Antofagasta (ANTO LN) Updates: Good Set Up For 2025
- This is a follow-up to our initiation on Antofagasta PLC (ANTO LN): Antofagasta (ANTO LN): An Initiation on a Mid-Sized Copper Miner, in which we provide some positive updates.
- The company guided a full-year copper production of 660-700k for FY25 (in line with expectations) and slightly higher gross YoY costs at the upper end (but better than street expectations).
- The long-term production plan of 900,000 tons by 2027 puts it under 5x EV-EBITDA for FY27 at spot prices (vs. the current 7.8x).
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
