Mike Wilson’s 2025 Outlook: Valuations, Inflation & The AI Economy

Dan Nathan and Guy Adami welcome back Mike Wilson, Chief Investment Officer and Head of U.S. Equity Strategy at Morgan Stanley. Mike reflects on his previous bullish pivot due to improved liquidity and the unexpected resilience of the market. They discuss the importance of earnings forecasts, the impact of liquidity on high-quality stocks, and potential shifts in international flows. The conversation turns to the passive investing trend, potential economic factors affecting interest rates, and the influence of international monetary policies, such as the BOJ's rate decisions. Key topics include the role of earnings revisions, currency impacts on multinationals, and how various sectors might react to the evolving economic landscape. The podcast delves into market valuations, the potential of AI, CapEx cycles, and the broader implications of liquidity. They conclude by discussing investor sentiment, the resilience of high-quality stocks, and the broader economic outlook heading into the first half of the year.

Timecodes
0:00 - 2024 Retrospective
8:20 - Valuations & Yields
16:00 - Trump & The AI Economy
25:40 - The Consumer
35:15 - What Mike Sees

About the Show:

On The Tape is a weekly podcast with CNBC Fast Money’s Guy Adami, Dan Nathan and Danny Moses. They’re offering takes on the biggest market-moving headlines of the week, trade ideas, in-depth analysis, tips and advice. Each episode, they are joined by prominent Wall Street participants to help viewers make smarter investment decisions. Bear market, bull market, recession, inflation or deflation… we’re here to help guide your portfolio into the green. Risk Reversal brings you years of experience from former Wall Street insiders trading stocks to experts in the commodity market.

Key Links:

#investing #stocks #stockmarket

The financial opinions expressed in Risk Reversal content are for information purposes only. The opinions expressed by the hosts and participants are not an attempt to influence specific trading behavior, investments, or strategies. Past performance does not necessarily predict future outcomes. No specific results or profits are assured when relying on Risk Reversal.

Before making any investment or trade, evaluate its suitability for your circumstances and consider consulting your own financial or investment advisor. The financial products discussed in Risk Reversal carry a high level of risk and may not be appropriate for many investors. If you have uncertainties, it's advisable to seek professional advice. Remember that trading involves a risk to your capital, so only invest money that you can afford to lose.

Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made.  This communication is not a recommendation or offer to buy, sell or retain any specific investment or service.

[RobbieNixon-dw]

Biggest lesson I learnt in 2024 in the market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.

[SergiannaPawson]

My major concern is how I can protect and preserve my wealth in savings against the various harmful economic forces, regardless of what the high and mighty economic talking heads discuss at economic seminars. What are the instruments I can buy to help meet my goal?

[MattsMkia]

Well, to be honest, politicians decrease debt through inflation. Then we end up with currencies with a whole lot of zeros on it. Back just 30 years ago $1 million was something now everyone that owns a house in Canada is a millionaire.

[NinaBella-xfgl]

Predicting inflation starting to rise again this quarter while leading indicators showing economy slowing (not to mention governm*nt figures pumped up during the election). Global economy very weak which affects US. Fed dropping rates 0.50 shows they're VERY worried about financial downturn/crisis. interest rates coming down are also an indication banks are LESS willing to loan money into existence. The question here is where is the inflation going to come from in the near term? Consumers are mostly tapped out which is 70% of US economy (consumption). Yes inflation very likely to return but not before it continues to come down... Inflation can be a concern, but remember, certain assets like stocks and Crypto’s acts as a hedge. Long & short-term trading is generally safer, allowing investors to weather market volatility. I have managed to grow a nest egg of around 2.2 B'tc to a decent 27B'tc in the space of a few months... I'm especially grateful to Alison Bruce Crypto, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.

[laurapadd]

Dividend investing is my go-to strategy! I’m growing my wealth with a buy-and-hold approach in my Roth account, focusing on top performers like Berkshire B stock, SCHD, and S&P 500 and total market ETFs. My taxable account is also generating consistent income through dividend-paying stocks. This combination is helping me achieve my financial goals!

[TVRadioVO]

Its really top notch that you get Mike Wilson every quarter. He's the best. Keep up the great work!

[LalithJayasuriya-gy]

The best vid yet on explaining crypto and associated markets. This from a trading intraday and short-medium or long term point of view. Was impressed that you showed the market cycle.Also the way you explained it. Regardless if it is stocks, currency, precious metals or real estate, crypto, that is being invested in, there is a cycle. As now crypto is a confirmed asset class, You already have taught me so much. Appreciate your time and effort in making the vid. ...I managed to grow a nest egg of around 3Btc’s to a decent 21Btc’s…At the heart of this evolution is Kerrie Farrell, whose deep understanding of both cryptocurrency and traditional trading has been instrumental. Her holistic approach to investment and commitment to staying abreast of market trends make her an invaluable ally in navigating this new era in cryptocurrency

[cliffakoko]

As always, a great analysis. Newcomers often wonder if it's too late to navigate the financial market, but the market is always unpredictable. Trading has more advantages than simply holding, so it's important to learn before diving in. Active trades are necessary to ride the market's waves. Thanks to Jordan Annabel insights, daily trade signals, and my dedication to learning, I've been increasing my daily earnings, managed to grow a nest egg of around 140k to a decent 632k. Kudos to the journey ahead!... ✊✊

[Mary-lad]

Thanks bud for keeping us financially Educated! Regardless of how bad it gets on the economy, I still make over $29, 000 every single week...

[JL-sifz]

Thanks for bringing back, Mike Wilson. He’s always insightful and massive alpha guest. Wonderful!

[s.w.]

Drink every time Dan says “you know what I mean”

[leondonald]

The high inflation is a significant reason why most retirees have sleepless nights. The increase in prices of everyday items puts them at risk of running out of money. As prices rise, the amount of money retirees can withdraw from their retirement savings also increases.

[jays]

He is among the best. Always enjoy these updates, they are truly superb!

[erensarioglu]

Thank you for having Mike Wilson on the show!

[LizaPhilips]

Inflation has a more immediate effect on people's quality of life than a stock or real estate market meltdown. It should come as no surprise that the current market sentiment is so pessimistic. We desperately need help if we are to survive in this economy. Like the property market, the stock and ETF markets continue to be wildly volatile. My $350k" portfolio has been reduced to rubble.

[RomansChelski]

I haven’t agreed with you three on the markets for the past 18 months - however this is really one of the best pods on macro equity. Well done!

[stevencarroll]

great guest and conversation, lots to digest. in particular appreciate the commentary around economic conditions relationship with political decision making, market sector performance, and yield differentials

[GGHome]

Guy has deleted in his mind the september podcast ? I got the transcript

[smsfelipe]

Good convo, on the broadening though, my portfolio is my best indicator and that has been happening since September 24

[helix]

Awesome! Learned a lot from Mike Wilson.