The investing world has awoken from a two-week holiday slumber, and a new year has begun. 2025 starts, as most years do, with more questions than answers. But the outcome for the global economy and financial markets seems unusually uncertain to us. High valuations and market concentration combined with softening economic data and rising policy uncertainty mean the picture is murky, at best.
Currently, there is a splintering in financial markets and economic data that is likely to prove temporary, but as this splintering mends, markets could be singing Gin Blossoms’ “Follow You Down” along the way.
But oh, it's heavenNowadays “Nowadays”, Roxie Hart, Chicago the Musical It’s good, isn’t it? “Let me start by saying that we think the economy is in a really good place, and we think policy is in a really good place.” Grand, isn't it? “The economy is strong overall...
In the grand ranking of defeated and desperate pleas for love and acceptance, Fräulein Sally Bowles’ haunting “Maybe This Time” at the end of the first act of Cabaret takes the cake. In a close second comes Value stocks in 2024. Defeated, desperate, unloved, unaccepted, the Value factor/style might as well apply to jobs in the chorus line at the Kit Kat Club.
Our last Weekly Edge addressed the potential that we could see improving economic data in the wake of the U.S. election, reflected by more optimistic consumer and business survey responses. Since then, we’ve seen that effect materialize in some places (consumer expectations) but not others (services business sentiment).
While markets have been shaky over the past two weeks, the positive trends remain broadly similar to those in the final two months of 2016. Stocks could muster another lurch higher if business sentiment begins to reflect a more bullish outlook for 2025, perhaps due to a combination of lower expected tax rates or less stringent regulation.
Given this backdrop of a stronger USD, tariff uncertainty, and weaker earnings, we see reason for U.S. investors to continue to broadly pick my friends (domestic stocks) over you (non-U.S. stocks).
The price action across equities, fixed income, and currency markets had many investors “remembering the first time” that Trump was elected in 2016, with the assumption that a similar playbook can be applied to today’s market.
“Everyone’s entitled to one good scare.” – Rounding up the Latest Economic News It’s officially November. The trick-or-treating is over, and the days of noshing on leftover candy have begun. As investors, the past several weeks made us feel a bit like a group of...
Last week, Goldman Sachs’ Portfolio Strategy Research team caused quite a stir when they evoked DeVotchka’s 2004 indie hit “How It Ends” (without lyrics the song is titled “The Winner Is” and provides the contemplative backdrop for the dysfunctional and endearing indie film Little Miss Sunshine. Take this as a sign to go ahead and eat the ice cream.)