Heading into 2025, there is a favorable outlook on consumer finance stocks due to the presence of positive catalysts which are believed not to be fully reflected in their current valuations, potentially leading to further gains. This positive sentiment is enhanced by the increased prospects of merger activities along with superior credit and excess capital situations.

The results of the recent November election have seemingly reignited enthusiasm, enhancing business and consumer confidence in anticipation of a more pro-business political climate. This shift has led to elevated expectations for the U.S. economy while reducing prospects for further easing by the Federal Reserve. This environment is forecasted to favor stocks related to consumer credit and spending, though the outlook for the mortgage market is less optimistic, remaining subdued due to high rates and low housing supply.

The firm is constructive on consumer finance stocks going into Q4 results, indicating improving consumer metrics and beneficial regulatory changes. The presence of slightly elevated interest rates is not seen as detrimental to fundamentals or stock performance. It is anticipated that the rally will resume for card issuers and network stocks.