The Aristotle List seeks improbable but possible outcomes, that Paul believes have a more than 30% chance of occurring and that could have a big effect on portfolios. They are not necessarily central scenario views, nor is the list internally consistent. Markets finished 2024 in mixed mood, and the list of surprises reflects that.
Paul thinks there is a chance US inflation goes above 4.0% in 2025, which would be challenging for many assets. He think it likely that US stocks underperform global equity indices and that the US dollar weakens during the year (in a rerun of the first year of the first Trump presidency). More positively, he thinks Turkish government bonds and Kenyan stocks could have another good year and that the price of EU carbon may break out above €90.
Politics and geopolitics could bring volatility. For example, discord within the EU (in part fomented by the new US president’s approach to Ukraine) could cause European government yield spreads to widen versus Germany. This could be worsened if political turmoil in France causes President Macron to step down (as Paul thinks is possible).
In sport he expects Europe to win the Ryder Cup on US soil for the first time since the “Miracle at Medinah” in 2012.
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Invesco Solutions develops capital market assumptions (CMAs) that provide long-term estimates for the behaviour of major asset classes globally.
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Unless stated otherwise, all data as of 31 December 2024.
Views and opinions are based on current market conditions and are subject to change.
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