We’re pleased to share our market overview for the first quarter of 2025.
The market pullback in January 2025, led by the semiconductor companies in light of Chinese AI developments, has been overshadowed by the more recent correction we have seen in global markets. Tariffs have always been a central tool in Trump’s protectionist agenda, but the extent to which the president was willing to push them has caught the market off guard. Consumer and investor confidence in the US has taken a hit and along with that, the US Dollar. However, earnings remain resilient, and we believe the sell off to be driven by sentiment and fear more than anything else. We are focused on the fundamentals and now see good value in certain areas of the US market, particularly given our baseline view of ‘slowdown, but no recession’.
We are seeing growth on divergent paths around the globe amid elevated policy uncertainty, which is creating unique opportunities for active managers. Europe is seeing inflation cool and earnings upgrades, India is going through a manufacturing revolution, consumer sentiment is picking up in China. Diversification has never been so important.