Analysts are predicting a significant stock market correction in the first half of 2025. This is based on three critical factors: a slowdown in consumer momentum, a softening labor market, and historically high stock valuations.
Consumer spending momentum has declined, indicating a potential shift in consumer behavior.
The labor market is also softening, with the risk of a recession looming larger.
Additionally, current stock valuations are high, making risk assets vulnerable to disruptions.
In light of these trends, investors are advised to adopt a defensive posture and consider buying the dip if stock prices fall by 30% or more. The bear market is expected to exceed a 20% decline at some point in the first half of 2025. It is important for investors to hedge their risks and remain vigilant as market conditions evolve.