Cracks began to emerge in the bullish USD story during February as poor retail sales and plunging services PMI reinforced negative fiscal headlines.
State Street Global Advisors
116 posts
Current market dynamics require investors to remain on high alert and differentiate between signal and noise. And that means continuing to climb the wall of worry in 2025.
EM equity investors have been in a defensive posture since the beginning of this month and it is fair to say they remain in a “wait and watch” mood on what we’re calling “wildcards.”
While outcomes are always highly uncertain, a consistent, disciplined, and repeatable investment process is firmly in their control.
Pinpointing pure AI investment exposures, as desirable as that may sound, is challenging and, even if pure exposures do exist, they may not fully capture AI’s potential.
Small caps underperform as yields rise due to higher financing costs and limited ability to refinance debt compared to large caps.
Investors should prepare their portfolios as the next decade may be one of vigorous markets and healthy active management.
The risks of high tariffs and a potential trade war may have a greater impact on currency markets going forward.
Since valuations have never been a good predictor of short-term price changes, they tell investors very little about what might happen next year.
The effects of recent shocks in global macro policy and politics seem to have simmered down only to reverse.
In the interconnected world in which we live, information shocks can ripple through the global economy and impact companies and economies far from an epicenter.