Contrary to what we are seeing now, the new, higher, US tariffs on imported goods will have temporary, be it a profound effect on the US and global stock markets.
US stock market could enter a bear market with a fall of more than 20 % or my even fall by 30 % measured by the main indices, but US stock market will recover in 5 to 7 months, according to Wolfteam Ltd.'s projections and estimates.
Most probably the Federal Reserve will react relatively swiftly and lower the Federal Funds Rate 3 or 4 times in 2025 and thus lower the interest rate levels in the US and global economy.
In addition, after the initial scare investors will understand that the tariffs are not that frightening or dangerous for financial markets, in Wolfteam Ltd.'s view.
Investors will go back in the market once they realize that the situation is not as bad as everybody seems to be assuming now. The adaptation to tariffs will be gradual and the effect on US based company's earnings will not be as high as most Wall Street equity research analysts are forecasting now. Wall Street equity research analysts earlier estimated a 15 % earnings growth for 2025, now most of them are estimating a 5 % earnings growth or no earnings growth of US based publicly listed companies.
US companies' earnings will grow by circa 7 % in 2025, according to Wolfteam Ltd.'s projections and estimates.
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