H1 2025 Market Outlook: Navigating Markets Through Policy Shifts and Geopolitical Headwinds

Moomoo Singapore's Chief Market Strategist Isaac Lim shares his insights on what investors should watch for in the first half of 2025, highlighting three major themes that could shape market dynamics.

"The first half of 2025 will have investors on the edge of their seats as their attention turns to Trump taking office for the 2nd time," notes Lim. The market strategist identifies three key themes that will dominate H1 2025:

1. The Three Ts: Trump, Tariffs & Trade WarsAs the new administration takes office, markets will closely monitor potential policy shifts, particularly around international trade. There are concerns that aggressive tariff implementations could trigger retaliatory measures from trading partners, potentially escalating into broader trade conflicts.

2. US Market Leadership with Tempered Expectations: While the US remains the preferred market, Lim advises investors to moderate their expectations for growth. With megacap valuations stretched and a substantial $7 trillion debt due this year, market gains may be more measured compared to previous periods.

3. USD Dominance Amid Persistent Inflation: The robust US labor market continues to support USD strength, while global bond markets show signs of stress. Markets are also pricing in potential inflationary pressures from expected fiscal policies.

Trading Opportunities

For H1 2025, Lim recommends three key investment approaches:

• Stay adaptable with US large/mid-caps, looking beyond megacaps for opportunities

• Consider fixed income opportunities in the current higher-rate environment

• Focus on dividend strategies, with Singapore stocks offering attractive yields and stability

For Singapore investors specifically, Lim highlights that "Singapore's low volatility market coupled with strong governance and currency makes it the preferred market to build dividends" in the current environment.

Read the complete H1 2025 Market Outlook report and detailed analysis: Moomoo SG Trend Updates - H1 2025.pdf