Navigating 2025: Trends shaping stocks, gold, and crypto markets

Welcome to Equiti Insights! In December’s edition, we’re covering S&P outperformance, ETF gains, gold’s 2025 potential, and crypto market trends - including Bitcoin's surge and altcoin prospects.

This is not financial advice, trading carries risk.

ETFs are emerging as a top choice for wealth building

Nadia ElBilassy | Senior Market Analyst

The S&P vs. MSCI

In 2024, market performance has been shaped by strong sectors and targeted investment strategies, with both US and emerging-market equities delivering impressive returns.

US stocks, especially large-cap tech, have been the top performers, with the S&P 500 posting a 26% return, including dividends, far outpacing the MSCI Emerging Markets Index, which returned just 9.7%.

Meanwhile, a focused investment strategy aimed at the top 5% of emerging-market companies has delivered notable results. By selecting 25-30 firms with strong governance, growth potential, and high capital returns, the portfolio includes leading names like Taiwan Semiconductor, Indian retailer Titan, and Brazil's NuBank.

The Sector Global Emerging Markets Fund, which follows this strategy, achieved a 37% return for the year ending September 30, surpassing both the S&P 500 and most of its peers.

ETFs deliver stellar gains amid market rally

2024 has been an exceptional year for wealth building, with exchange-traded funds (ETFs) taking the lead. According to Bloomberg Intelligence, nearly 96% of ETFs have posted positive returns over the past year, with most showing double-digit gains.

In contrast, hedge funds have faced challenges. While the average US-domiciled ETF has risen by 14% in the last 12 months, hedge fund strategies have delivered much smaller returns. Complex, high-fee strategies - like diversifying across markets or shorting underperforming stocks - have struggled, as tech-driven rallies have pushed low-cost ETFs to new highs.

Two key takeaways:

• Stock market wealth boom: US households' net worth reached a record $163.8 trillion in Q2, reflecting the historic gains for stockholders.
• Challenges for active managers: With US equity ETFs delivering outstanding returns, it is becoming harder for active managers to persuade retail investors to diversify into international markets or less popular assets.

The euro: Will it fall under parity?

Following the US election, currency strategists have significantly downgraded their euro forecasts, with some predicting it could near parity with the US dollar. At least ten major financial institutions, including Barclays, Deutsche Bank, and Nomura, have reversed their previously optimistic outlooks. This shift is mainly due to concerns about potential global trade restrictions under President Donald Trump’s economic policies, which could harm Europe’s export-driven industries.

Since Trump’s victory, the euro has fallen by almost 3%, with fears of tariffs on European goods adding to political uncertainty in key European countries. Reflecting this growing pessimism, data from the Depository Trust & Clearing Corp. shows that around €2 billion in options are now betting on the euro dropping to $1 by the end of next year.

Gold forecast in 2025

Gold has become the trade of the year, with Goldman Sachs naming it one of the top commodity trades for 2025. Investors are increasingly turning to gold to diversify their portfolios and capitalize on potential price gains, while Eastern Europe has emerged as a key buyer, fueling the rally. Goldman forecasts that gold prices could continue rising during Trump’s presidency, potentially reaching $3,000 per ounce by December next year.

This outlook persists despite a short-term correction triggered by delayed interest rate cuts and renewed risk appetite following Trump’s return to office.

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Crypto watch: Is this the start of altcoin season?

The cryptocurrency market experienced its largest outflow of stablecoins from exchanges since April, signalling a shift in investor behaviour as November unfolded. This movement occurred alongside elevated price levels, indicating that traders are locking in profits following the recent market rally.

The funds withdrawn from exchanges may be repositioned into altcoins or held in reserve to take advantage of potential future price corrections. This timing coincides with renewed interest in altcoins, many of which are near their all-time lows, offering opportunities for value-seeking investors.

After Bitcoin's recent surge, the market seems ready for a rotation into alternative digital assets. The idea of an approaching “altcoin season” is gaining traction among investors, who believe this could signal a turning point for the broader crypto market. With select altcoins at attractive entry points, sentiment is building that the profit-taking seen in November could drive a diversified rally in the months ahead.

About Nadia

Nadia ElBilassy is Senior Market Analyst at Equiti certified by the UAE’s Securities and Commodities Authority, frequently seen at panels and on regional news networks.

https://www.dhirubhai.net/in/nadia-el-bilassy-acsi-174506113/ | Nadia El Bilassy ACSI

Crypto watch: Is this the start of altcoin season?

Ahmed Azzam | Regional Financial Market Analyst

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The cryptocurrency market experienced its largest outflow of stablecoins from exchanges since April, signalling a shift in investor behaviour as November unfolded. This movement occurred alongside elevated price levels, indicating that traders are locking in profits following the recent market rally.

The funds withdrawn from exchanges may be repositioned into altcoins or held in reserve to take advantage of potential future price corrections. This timing coincides with renewed interest in altcoins, many of which are near their all-time lows, offering opportunities for value-seeking investors.

After Bitcoin's recent surge, the market seems ready for a rotation into alternative digital assets. The idea of an approaching “altcoin season” is gaining traction among investors, who believe this could signal a turning point for the broader crypto market. With select altcoins at attractive entry points, sentiment is building that the profit-taking seen in November could drive a diversified rally in the months ahead.

About Ahmed Ahmed Azzam is a Regional Financial Market Analyst at Equiti specialising in technical and fundamental analysis, offering insights as a regular guest on well-known TV networks.

https://www.dhirubhai.net/in/ahmedazzamfx/ | Ahmed Azzam

Challenges and opportunities in emerging markets and crypto

Farah Mourad | Senior Market Research Analyst

Would a stronger dollar fuels US equity outperformance?

The relationship between the US dollar and emerging market (EM) stocks, as seen in the MSCI Emerging Markets Index, shows an interesting pattern: when the US dollar strengthens, emerging market stocks usually struggle, while US stocks tend to perform better.

This happens because a stronger dollar can make things harder for emerging market economies, such as raising the cost of debt and weakening their local currencies. On the other hand, a stronger dollar can help US companies by making their products cheaper for foreign buyers and boosting earnings from their international operations.

S&P 500: All time highs?

Despite ongoing economic uncertainty and market volatility, the bullish trend remains strong among investors. Data shows that asset managers, leveraged funds, and other institutional investors have built a record net long position of over 240,000 contracts in the S&P 500 - marking the highest level ever recorded. This suggests that institutional players are betting heavily on the market’s continued upward momentum, expecting growth to persist and the recovery to remain stable.

Historically, similar positioning volumes - about half of what we’re seeing now - preceded the bear market that began in 2021.

This adds an interesting twist to the current situation: while the large number of long contracts signals strong optimism, the historical parallels highlight the potential for market reversals, raising questions about whether the bullish outlook can be sustained.

Crypto spotlight remains firmly on Bitcoin

Institutional investors and spot ETFs are driving Bitcoin’s surge, leaving altcoins behind. Unlike retail traders, these players aren’t shifting their funds into altcoins, particularly the smaller ones that still depend on crypto exchange users for liquidity.

With the altcoin market cap still below its previous peak, there is a clear lack of fresh capital from new retail participants. Until retail-driven Bitcoin FOMO reignites exchange activity, the idea of an "altcoin season" may remain out of reach.

There is hope, however. Spot ETFs for altcoins like Solana, XRP, and Litecoin are on the horizon, which could revitalise the market. But for a genuine altcoin rally, it’s not just about approvals, it’s about reigniting retail enthusiasm to bring fresh energy to crypto exchanges.

?About Farah Farah Mourad is a Senior Market Analyst at Equiti, recognised for her award-winning expertise in risk management and contributions to top-tier platforms.

https://www.dhirubhai.net/in/farahmurad/ | Farah Mourad