the S&P 500, you want to let your winners ride.” Since 1990, he noted that the top three sectors in a given calendar year tend to outperform in the next year by about 300 basis points on average 75% of the time. But the potential of tariffs under President-elect Donald Trump’s new administration could be a reason for some concern heading into 2025. “If you are going to worry about something, it is that the tariffs are not just talk but truisms, and that we will actually be putting up barriers to trade,” Stovall said. “If that is an actuality, I think that could be a very big problem.” 4 Hours Ago German government failure and February snap election are headwinds for Eurozone stocks: Capital Economics The failure of German Chancellor Olaf Scholz’s government in a parliamentary confidence vote and elections tentatiuvely set for Feb. 23 mean more challenges for euro-zone stocks markets, according to Capital Economics senior economist Hubert de Barochez. The German DAX index has climbed 22% so far in 2024, but entitled a research report after the Bunestag vote, “Headwinds to euro-zone stock markets to blow harder.” “While equities in Germany have managed to ride out weak growth and political uncertainty this year, those in France have not. We suspect that they will all fare poorly next year, as those adverse conditions remain and a trade war takes a toll, the The European Central Bank can’t undertake the policies necessary to revive the European economy, Capital Economics said. “Individual governments are arguably the best placed to drive a turnaround in the economy,” de Barochez wrote. “But most of them seem either unable or unwilling to do so, and in particular those in the two biggest economies: Germany and France.” — Scott Schnipper 4 Hours Ago Risk commentary may overshadow Fed dot plot this week, State Street strategist says Wednesday’s Fed decision will come with an updated summary of economic projections from FOMC members, including a new “dot plot” that projects the path of interest rate cuts. However, the more interesting output from the meeting could be commentary about how the central bank views the risks of inflation and a potential rise in unemployment, said Cayla Seder, macro multi-asset strategist at State Street. “The December SEP is interesting in that the soonest date is a whole year away. A lot can happen in a single year, so where I think we’ll get a bit more color and a bit more clarity is actually in the text around the SEP as opposed to the dots themselves,” Seder said. One area of the dot plot that could be impactful is the final point, representing the terminal rate. A move higher could indicate that Fed officials think the so-called neutral interest rate is higher than they previously thought. “We’ve consistently seen that rise. I think that’s one thing that would hint at a hawkish cut,” Seder added. — Jesse Pound