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JPMorgan's outlook for the stock market in 2025: value beats growth, and the theme of information technology is most promising

AInvestWednesday, Dec 11, 2024 6:00 pm ET
2min read

Securities Times reporter Xuerong

Recently, Morgan Stanley's chief Asia and China equity strategist, Liu Mingdi, released a 2025 China stock market outlook report.

In the report, Liu Mingdi reviewed the market situation in 2024 - the MSCI China Index once bottomed out in January and February, and rose about 15% as of November 22, becoming one of the best-performing markets in Asia. She believes that potential upside opportunities can be focused on three aspects in 2025: first, the policy measures to be introduced at the National People's Congress in March 2025 may help offset potential tariff hikes; second, the Sino-US relationship may ease, but the timing is still to be observed; third, the new "nine-point" policy released on April 12, 2024, shows strong support for the development of equity assets.

At the same time, Liu Mingdi also mentioned that the Chinese stock market in 2025 will inevitably face some disturbance risks, such as tariffs, high US dollar index, and high market volatility.

Regarding target points, based on the baseline scenario, Morgan Stanley sets the target points of MSCI China Index and CSI 300 Index at 67 and 4200 points, respectively, at the end of 2025. In the bullish scenario, the target points of MSCI China Index and CSI 300 Index are 76 and 4700 points, respectively, indicating that they may gain double-digit gains.

Liu Mingdi believes that in 2025, high dividend stocks (such as banks, hydropower, energy and home appliances) and some growth sectors (such as autonomous control technology and artificial intelligence in the information technology field) are expected to perform well. Specifically, in terms of allocation, value stocks will outperform growth stocks in the context of weakening Fed rate cut expectations; energy and utilities can be over-weighted; consumer goods (optional consumption, essential consumer goods, raw materials) can be under-weighted; and industry and real estate will remain neutral.

Regarding the financial, communication services and healthcare sectors, Morgan Stanley maintains a neutral stance overall, preferring state-owned enterprises with dividend stocks. From a tactical perspective, Morgan Stanley believes that leading state-owned enterprises (such as brokerages) may benefit from the revaluation of value brought about by merger and acquisition policies. At the same time, Morgan Stanley is bullish on the medical equipment sector, which may benefit from low base year and policy support for equipment upgrades.

Regarding the consumer sector, Morgan Stanley believes that e-commerce stocks with high index weights may be under pressure, but in the consumer service sector, such as tourism and education may outperform the market; the liquor industry may lag behind in the essential consumer goods sector. In the industrial sector, Morgan Stanley is relatively bullish on the transportation sector, especially the express delivery industry with business volume growth.

Regarding theme investment opportunities, Liu Mingdi said that Morgan Stanley is most bullish on the information technology theme, which is mainly due to policy support for national security and technological advancement.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.