He highlighted the likelihood of global economic pressures, including a slowing US economy compared to 2024, a weak Europe, and continued weakness in China. Combined, these conditions create a tough environment for emerging market equities.
Also Read: Samir Arora’s advice for stock picking in 2025
Dennis expects US 10-year bond yields to rise to 5% or higher, driven by inflationary pressures from tariffs and increasing bond supply. This rise in yields, in turn, will keep the US dollar relatively strong.
The 10-year bond yields are currently around 4.573%.
Also Read: Dollar dips from two-week high as US bond yields cool
The US Federal Reserve may cut rates slightly, possibly twice in 2025, but
Dennis believes this will not be enough to offset the upward pressure on bond yields. The bond market’s struggles will add to the challenges for emerging markets, as the strong dollar and high yields often discourage investment in riskier assets.
For more details, watch the accompanying video
