January 16, 2025

In 2024, most equity benchmarks saw an increase in value, signaling a year of growth following previous periods of stagnation. The S&P 500 rose by approximately 24%, the Dow Jones by 13.2%, and the German DAX by 18.83%. Even the Chinese Shenzhen Composite Index grew by 3.91% after a rollercoaster ride throughout the year. The biggest winner by far was the technology sector, which saw growth of over 26%. Overall, 2024 represented an improvement in financial markets. Many expect the same trend to continue in 2025.

2024 in a nutshell

In 2024, the American people voted for Donald Trump to return to office in a historical comeback. The head of the Federal Reserve said that the time has come for policy to adjust, ushering in the beginning of rate cuts. AI development made Nvidia worth 3.4 trillion dollars. China implemented a series of economic stimulus measures to counteract challenges and accelerate growth. Malaysia and Singapore launched a special economic zone in Johor. Iran faced a major blow in both Lebanon and Syria. And it was the last year during which Russian gas flowed to Europe through pipelines in Ukraine.

When it comes to the green transition scene, critical minerals demand surged due to their essential role in clean energy technologies, with significant increases in lithium, nickel, and cobalt. However, supply chain challenges arose, including long development times for new mines and geopolitical tensions affecting global mineral availability. Governments responded with policies to secure supplies, such as the U.S. Department of Energy’s focus on reducing vulnerabilities and Australia’s green regulations. Technological advancements in renewable energy were notable, with solar power generation and electric vehicle sales booming, particularly in China. International forums like the Critical Minerals and National Security Conference and the OECD Green Growth Forum highlighted the intersection of minerals, national security, and sustainable development. Energy security was a key concern for several countries, and critical minerals were the obvious vehicle to drive economies towards that goal.

What might 2025 bring for the financial markets and the global economy?

A degree of volatility can be expected in 2025 with Trump coming back to office. He has already caused some ruckus with Denmark with his remarks about Greenland and a national economic emergency plan. Despite this, there are still positive trends taking place that will likely withstand the pressures. Here are a few.

Technology companies will continue to shine

The technology sector in 2025 is poised for growth, driven by advancements in AI, the thriving semiconductor industry, and strategic M&A activity. Companies like Nvidia and Snowflake are capitalizing on AI’s potential, while high valuations for giants like Microsoft and Alphabet reflect sustained investor confidence. The semiconductor sector, essential for AI infrastructure, continues to expand, and China’s strategic focus on innovation intensifies global competition. Despite high expectations, the monetization of AI technologies remains a key investor focus. Overall, firms demonstrating robust growth, AI integration, and strategic positioning are set to thrive in an optimistic yet discerning market environment.

Additionally, the humanoid robotics sector, projected to reach $38 billion by the 2030s, is rapidly advancing with contributions from companies like Tesla and startups such as Figure AI, focusing on industrial applications. Nvidia’s CEO highlights “physical AI” in robotics as a multitrillion-dollar opportunity. While high costs and regulatory challenges remain, the industry’s progress signals a growing role for humanoid robots in manufacturing and beyond, supported by significant investments and technological breakthroughs. A promising player in this space is Realbotix, a company specializing in customizable humanoid robots with advanced AI. With its strong financial position, strategic initiatives, and focus on companionship and AI integration, Realbotix (TSXV: XBOT | OTCQB: XBOTF | FSE: 76M0.F) is well-positioned to capitalize on the expanding robotics market, making it an attractive investment as the sector continues to evolve. Another startup worthy of consideration is NextGen Digital (CSE: NXT | FSE: Z12), which is a good option for investors who want to gain exposure to micro-technology digital platforms.

Trump Tariffs will hit

President-elect Donald Trump’s upcoming tariffs in 2025, including a 25% tariff on imports from Mexico and Canada, and a 60% tariff on Chinese goods, are expected to impact various sectors. Domestic manufacturing, particularly in steel and aluminum, could benefit from reduced foreign competition, while automakers sourcing domestically may gain an edge. However, sectors reliant on international trade, such as automotive suppliers, electronics, and consumer goods, face higher production costs that could lead to higher prices. Additionally, agriculture may suffer from retaliatory tariffs. Overall, while some domestic industries may see short-term gains, the broader economic impact could create challenges for import-dependent sectors.

Europe will have to adjust to losing Russian gas supplies and a slow growth

With the cessation of Russian gas supplies via Ukraine in 2025, Europe has implemented a range of strategies to mitigate the impact, including diversifying energy sources through increased LNG imports, expanding energy storage, and promoting conservation. The crisis has triggered significant economic challenges, particularly in energy-intensive industries and consumer prices. Geopolitically, Eastern Europe, particularly Slovakia, has raised concerns over transit disruptions, while Moldova faces energy instability due to a lack of Russian gas. In the long term, Europe is accelerating its shift towards renewable energy, enhancing energy efficiency, and forging new energy partnerships to ensure energy security and independence. These efforts aim to create a more resilient and sustainable energy system for the future.

The cessation of Russian gas supplies is expected to create a mixed impact across various industries. Renewable energy companies like Sono Group (OTCQB: SEVCF), Ørsted, Iberdrola, and Vestas are poised to benefit from Europe’s push for green energy, while LNG suppliers like Cheniere Energy and Shell will gain from increased demand for alternative gas sources. Energy storage firms like Fluence Energy and infrastructure operators such as Trans Adriatic Pipeline will see growth as Europe diversifies energy sources. However, companies heavily reliant on Russian energy, such as Gazprom and Eni, as well as energy-intensive industries like BASF and ArcelorMittal, will face higher operational costs. European automakers and agricultural firms, which depend on stable energy prices, could also be adversely affected by the price hikes. Overall, the energy shift will benefit those in renewables and LNG, while traditional energy and high-consumption sectors will face challenges.

Demand for critical minerals will continue to grow

The growing demand for critical minerals in 2025, driven by the transition to clean energy, the expansion of electric vehicles (EVs), and technological advancements, presents significant opportunities for exploration companies in the U.S. and Europe. Government initiatives, such as the U.S. Inflation Reduction Act and the EU Green Deal, are backing domestic mining projects, which incentivize local exploration efforts. This demand surge, especially for minerals like lithium, cobalt, and nickel, is creating lucrative opportunities for companies involved in mineral exploration, as they stand to benefit from increasing investments and partnerships in mining projects. Additionally, the geopolitical shift towards reducing dependence on Chinese minerals further elevates the strategic importance of domestic mineral exploration in these regions.

However, while U.S. and European exploration companies are well-positioned to capitalize on this growing demand, they must overcome challenges such as environmental regulations, long development timelines, and public opposition to mining. The shift towards more sustainable and independent supply chains requires significant investment and innovation in mining technologies, such as remote sensing and automation, to discover new deposits. Despite these hurdles, the exploration of critical minerals remains a key component of both regions’ energy security and clean energy transitions, making them critical players in the global effort to secure the materials needed for renewable energy and advanced technology industries.

Investors who want to add mineral exploration stocks to their portfolios can consider high-potential companies like Amex Exploration (TSX-V: AMX | FRA: MX0 | OTCQX: AMXEF), Alta Copper (TSX: ATCU | OTCQX: ATCUF | BVL: ATCU), Arctic Minerals (STO: ARCT), Canadian North Resources (TSXV: CNRI | OTCQX: CNRSF | FSX: EO0), QuestCorp Mining (CSE: QQQ), Demesne Resources (CSE: DEME | OTCQB: DEMRF | FSE: RK9), First Nordic Metals (TSXV: FNM | OTC: FNMCF), Lithium Chile (TSXV: LITH | OTCQB: LTMCF), and Sonoro Gold (TSXV: SGO | OTCQB: SMOFF | FRA: 23SP).  Those companies are at different developmental stages and offer different exposure to different minerals, allowing investors to diversify their portfolio and maintain minimal risk.

The prospects for the Chinese economy are still bright but moderately so

China’s economy in 2025 is projected to experience modest growth, with a GDP increase of around 4.5%, reflecting persistent deflationary pressures and challenges in key sectors. Despite government stimulus measures, such as relaxed monetary policies and trade-in subsidies, consumer prices have risen slowly, and bond yields have reached historic lows, signaling concerns over stagnation. Consumer confidence is expected to decline, especially among lower-tier consumers, while youth unemployment remains a critical issue, with many young people withdrawing from the workforce. Although luxury market demand is stable among high-tier consumers, the broader economy faces significant structural challenges, and the effectiveness of stimulus measures will be crucial in shaping the country’s economic trajectory moving forward.

Conclusion

2025 is expected to be a continuation of the recovery we have witnessed in 2024. Despite some volatility triggered by President-elect Donald Trump’s tariff plans, which are expected to impact sectors like manufacturing, agriculture, and electronics, there are positive trends in several industries. Technology companies, particularly in AI, semiconductors, and robotics, are poised for continued growth, with companies like Nvidia and Realbotix capitalizing on AI advancements and robotics applications. Meanwhile, the demand for critical minerals, driven by the green energy transition and EV expansion, presents significant opportunities for U.S. and European exploration companies, though regulatory hurdles and long development timelines remain challenges.

Europe’s energy landscape will also undergo significant changes as it adjusts to losing Russian gas supplies, with a focus on increasing LNG imports, renewable energy, and energy efficiency. This shift benefits companies in the renewable energy and LNG sectors while posing challenges for industries reliant on Russian energy. Meanwhile, China’s economy is expected to grow modestly, facing deflationary pressures, stagnant consumer confidence, and rising youth unemployment. The country’s efforts to stimulate growth will be key in navigating these challenges, but the economic outlook remains cautiously optimistic. Overall, 2025 is expected to bring a mix of growth, adjustments, and challenges across sectors and regions.

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