Overview of the annual meeting of the World Economic Forum (WEF) held under the theme ‘Cooperation for an Intelligent Age’ in Davos, Switzerland, 20 January 2025.
Anadolu | Anadolu | Getty Images
US President Donald Trump has only been in office for a few days, but his influence on the markets is already significant.
The S&P 500 cut the other record close on Thursdayafter the head of the White House called lower interest rates and cheaper oil prices in an address at the World Economic Forum in Davos, Switzerland.
Investors also bet on potential tax cuts and deregulation under the new president, lifting stocks.
Not everyone is optimistic, however, and some — like JPMorgan Chase CEO Jamie Dimon — are suggesting markets may be overvalued.
After a week of interviews with business leaders, lawmakers and investors in the Swiss ski resort, here’s what industry leaders told CNBC:
Nicolai Tangen, CEO, Norges Bank Investment Management
“I don’t think you should give any advice to the US, but if you look at the risk to the financial markets, I think inflation is certainly one of them, and it’s all fueled by tariffs,” Tangen said Tuesday. “Geopolitical tensions are generally negative for financial markets and for financial returns.”
Tangen added that “purely financially” Trump’s arrival will be “very positive” for many American companies.
Khaldoon al-Mubarak, CEO, Mubadala
“Continuing the trends that we saw in 2024 which was a positive year in most markets… I see that if it continues into 2025, I see continued strong tailwinds in the major markets, the US, Asia, especially the growth driven markets in Asia,” al-Mubarak told CNBC’s Dan Murphy on Monday.
“I see continued good tailwinds in technology, healthcare and financial services, life sciences,” he added. “So I would say, maybe almost the same words I used last year: cautiously optimistic. When I look at 2025, it’s going to be an exciting year.”
Larry Fink, CEO and Chairman of BlackRock
“I am cautiously optimistic — that being said, I have scenarios where it could be pretty bad, Fink told CNBC’s Andrew Ross Sorkin.
“I believe we would have tremendous growth if we unlocked all this private capital, [but]at the same time, some of this will unlock new inflationary pressures,” he explained. “And I believe that’s a risk that’s not factored into the market.”
Christian Sinding, CEO, EQT
Sinding, CEO of Swedish private equity firm EQT, told CNBC’s Karen Tso and Steve Sedgwick that the market for M&A and large corporate deals “continues to improve.”
“We had a record year in 2024, we invested more than $20 billion,” he said. “We’ve done more than $10 billion worth of exits, and that’s sort of building up to 2025. [when] I think a lot of market participants are ready to transact now, whether it’s private equity or family offices or strategic buyers. And, of course, if you look at the global capital markets, the IPO market is wide open. Credit markets are strong, so we are quite positive about next year.”
Ted Pick, CEO, Morgan Stanley
Pick said he believed corporate earnings could lift markets over the next 12 to 24 months as they “continue to be strong.”
“It’s kind of an indicator … How many companies are really talking about recession at this point, how many are talking about inflation? I feel like earnings extraction looks pretty optimistic,” he said.
“More importantly, I know we like to look at the index, but the index is dominated by six technology companies — all of which, by the way, are doing great — but if you look at deregulation opportunities in the energy sector, in the financial services sector, those sectors are still in multiple amounts that are not so expensive,” added Pick.
“If you’re an investor and you’re thinking about allocations over the next 12 to 18 months, there could certainly be a drop in the index level, but [do] do you really want to think about where I’m exposed?”
Jamie Dimon, CEO, JPMorgan Chase
Dimon said he thinks U.S. asset prices are “kind of overblown” at current levels.
“By any measure, they’re in the top 10% or 15%,” Dimon told Andrew Ross Sorkin on Wednesday, referring to the U.S. stock market. “They are inflated and you need pretty good results to justify those prices.
“We all hope for that, and growth-focused strategies help make that happen, but there are downsides that may surprise you,” he added.
David Solomon, CEO of Goldman Sachs
Solomon said markets are at risk and there is a sense of optimism in stocks due to both the new US administration and advances in technology.
Solomon too said Andrew Ross Sorkin that he was noticing a focus on growth, in the US, as well as in his conversations with European clients in Davos.
“I think people are optimistic and it’s not going to be a smooth, perfect path, but people are optimistic that we’re going to start a program that’s more growth-oriented. We’re going to free up some investment, unlock the private sector a little bit, but more, and it has to be constructive,” he said.
“It’s hard to argue with the fact that equity multiples are high… I think the stock markets are showing a sense of optimism right now, but they’re also showing a sense of optimism about growth and technology, particularly this wave of artificial intelligence. Of course it’s not going to be a straight line, but some of the technology that we see, the possibilities for that technology to significantly improve productivity are extraordinary.”
Christine Lagarde, President of the European Central Bank
Lagarde said Karen Tso that there is a difference in monetary policy between the Eurozone and the US due to the “different economic environment”.
She also said she was not “overly concerned” about the risk of inflation being imported into Europe from abroad, adding that she expected the ECB to continue to gradually cut interest rates as the rate of price growth moved towards its target.
“We are certainly interested in seeing US growth, because US growth has always been a positive factor for the rest of the world,” Lagarde said.
Ray Dalio, Founder, Bridgewater
Bridgewater founder Ray Dalio told CNBC that price-to-earnings ratios are high in U.S. markets, but there may be more room for upside in AI users.
“We’ve already gone pretty far … I think it’s driven by sectors that are great sectors, disruptors, AI and so on.”
“I don’t think it’s come down to the applications of artificial intelligence, the use of artificial intelligence … I think the applications of artificial intelligence have been under-appreciated.”
Brian Moynihan, CEO, Bank of America
Moynihan said Andrew Ross Sorkin on Tuesday he believed that US markets have room for growth in 2025 and that the key concern for business and financial services will be regulatory policy, not inflation.
“Our research team thinks there’s room for improvement this year, they predict the market will grow. Not as much as last year, and it’s unusual that you’ve had very strong growth for several years in a row, but it’s come several years at very unusual times,” he said.
Moynihan added: “I believe if you look at the key thing for businesses in general, including financial services and banking, it’s a matter of regulation.”
Sergio Ermotti, CEO, UBS
US President Donald Trump’s proposed tariffs could stave off disinflation and keep interest rates higher, the bank chief said said Andrew Ross Sorkin on Tuesday.
“Inflation is much stickier than we’ve been talking about,” Ermotti said.
“Tariffs probably won’t really help to reduce inflation. And therefore I do not see [interest] rates are falling as fast as people believe,” he said.
CS Venkatakrishnan, CEO, Barclays
Venkatakrishnan, whose UK bank generates about 40% of its revenue in the US, said he was “optimistic” about transaction activity in the US this year.
“I think two things are driving it. One is that interest rates have reached a relatively stable level. Our economists are calling for maybe one rate cut in the US over the next year,” he said. said Andrew Ross Sorkin.
“They’re still high, but they’re stable, so you can at least plan better, because you don’t have volatility in rates. The second is with the change in [U.S.] management, mergers should be easier.”
Venkatakrishnan added that he expects President Trump to ease regulation, which “generally speaking would be good for business sentiment and good for business opportunities.”
Rachel Reeves, British Chancellor of the Exchequer
Reeves, the UK must attract more supervisory investment to boost economic growth he told CNBC.
“My message to US investors and global investors is: Britain is open for business, we want your investment.”
She also discussed Trump’s threats of global tariffs.
“I understand that President Trump is concerned about countries running large and persistent trade surpluses with the US. That is not the case for the UK,” Reeves said.
“We are not part of the problem here. So we, the UK, increased trade with President Trump the last time he was in office.”
