Looking forward to 2025, there is a positive outlook for the brokers, asset managers, and exchanges sector, suggesting a favorable environment potentially yielding a third consecutive year with 20% or more in total returns for U.S. equity markets. The optimism hinges on broader capital markets activity, possible reductions in regulation fostering product innovation and capital deployment, alongside potential cuts in individual and corporate taxes.

Alternative asset managers are noted to experience sustained secular tailwinds, with distinct growth prospects in the retail and wealth sectors, which are considered the most attractive. Conversely, exchanges are viewed as having less robust performance in positive markets, displaying slower growth compared to more asset-sensitive financial sectors like asset managers and selected brokers. Furthermore, it is anticipated that certain policies could specifically benefit energy exchange businesses, albeit the growth projections for other asset classes appear less compelling. The resilience of short-term rates is expected to bolster margin lending and other high-margin operations, and a prospering retail customer base might prolong an active trading phase for retail investors.

Cboe Global Markets is perceived to be facing stagnant sales growth due to maturing trends in its principal SPX franchise, variable growth in VIX products, and market share losses in U.S. equities and options. The slowing performance of its Index franchise, which comprises a significant portion of its net revenue and has fueled much of its historical growth, is considered to overshadow other initiatives. A modest growth in mid-single-digit earnings is anticipated for Cboe over the coming years, compared to its previous low-to-mid teens growth rate.