Equities & Multi-Asset CIO Update: Positioning for Clarity in a Cloudy Market

2025 started with high hopes for economic growth and political change. Investors were optimistic about regulatory, energy price, and tax relief under the new presidency, despite some anticipated tariff increases and lower immigration. However, US equity markets declined in the first quarter, breaking their streak of quarterly gains. The "Liberation Day" tariff announcements on April 2 caused significant global volatility. US growth stocks suffered due to increased AI competition and concerns over capital expenditure, while large-cap value stocks, especially in the energy sector, saw positive returns. 
  
Outside the US, equity markets performed better in local currencies, boosted by a weaker dollar. Germany, Hong Kong, and Switzerland were top performers, while Australia and Japan lagged. The April tariff announcements led to more trade tensions and market volatility, with the largest tariff rate hike in US history adding to the complexity. Companies are cautious with investments and hiring, leading to earnings downgrades in consumer sectors, while tech and financial sectors remain strong. Active management and quality investments are crucial to navigating this uncertain landscape.

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[4526734] 5/2025 
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