Market Commentary

February 10, 2025

The equity market languished in the first two weeks of 2025 as investors reduced risk ahead of calendar fourth-quarter 2024 corporate earnings reports and the U.S. presidential transition.  However, better-than-expected earnings, declining 10-year Treasury yields, and chatter that President Trump might take a more measured approach to tariffs helped propel stocks broadly higher in the third week of the month.

Currently, we are raising the portfolio’s exposure to industrials as the Manufacturing PMI shows signs of continued improvement, and earnings expectations have become more realistic.  Additionally, we are adding to selected financials, particularly banks, which stand to benefit from a steeper yield curve, more active capital markets, deregulation, stable credit conditions, and stronger loan growth in 2025. Concerns related to DeepSeek, many of which are unfounded, have also led to attractive opportunities in technology stocks.  On the other hand, given the currency-, tariff-, and GPL-1-related risks, we are generally avoiding consumer staples.

For our latest full Global Investment Outlook & Strategy Update, download the .pdf document.