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Corporate Earnings Off to a Solid Start in 2025

The stock market’s performance is a function of two variables: earnings and valuations. A company generates profits, and investors assign a multiple to those profits, such as 15x or 20x earnings, to determine the company’s valuation. This year, earnings have been in the spotlight as policy uncertainty around tariffs and…

06/01/25 | Monthly Letter

Reflecting on the YTD Market Volatility & Recovery

Monthly Market Summary The S&P 500 Index returned +6.3%, its strongest 1-month return since November 2023. Large Cap Growth stocks led the rally, with the Nasdaq 100 and Russell 1000 Growth gaining +9.2% and +8.9%, respectively. Technology was the top-performing S&P 500 sector for a second consecutive month, with the…

05/24/25 | Chart of the Month

Understanding the Difference Between Soft and Hard Economic Data

Soft and hard economic data are back in the news as trade policy changes. Soft data, such as surveys, measures sentiment, expectations, intentions, and how respondents feel about the economy. In contrast, hard data measures actual results and activity, such as production, spending, and job growth. While they typically move…

05/01/25 | Monthly Letter

Rising Policy Uncertainty Leads to Increased Market Volatility

Monthly Market Summary The S&P 500 Index returned -0.9%, outperforming the Russell 2000 Index’s -2.3% return. Technology was the top-performing S&P 500 sector, followed by Consumer Staples, Industrials, and Utilities. Energy returned -13.9% as oil prices fell -18.6%. Bonds ended the month unchanged despite intra-month volatility, with the U.S. Bond…

04/30/25 | Chart of the Month

Making Sense of the Tariff Announcement

Trump Administration Introduces New Tariff Measures On April 2nd, the Trump administration unveiled a sweeping set of tariffs. A baseline 10% tariff applies to all imports from all countries unless specific exemptions are granted. Additional “reciprocal tariffs” target approximately 60 countries deemed the worst offenders, based on existing tariffs on…

04/01/25 | Quarterly Letter

1Q 2025 Recap & 2Q 2025 Outlook

Key Updates on the Economy & Markets Stocks fell in the first quarter after two consecutive years of gains exceeding +20%. The year started off strong, with the S&P 500 reaching a new all-time high in mid-February. However, sentiment shifted late in February amid rising policy uncertainty in Washington, and…

03/01/25 | Chart of the Month

Understanding the Current Market Selloff

Recap of Year-to-Date Market Performance Stocks started 2025 trading higher but have since pulled back. The S&P 500 has declined more than -8% from its all-time high on February 19th, lowering its year-to-date return to -5% (Figure 1). The Nasdaq 100, an index of technology and growth stocks, is down…

03/01/25 | Monthly Letter

The Market Navigates Economic and Policy Uncertainty in February

February Market Summary The S&P 500 Index returned -1.3%, outperforming the Russell 2000 Index’s -5.2% return. Six of the eleven S&P 500 sectors traded higher, led by defensive sectors. Bonds traded higher, with the U.S. Bond Aggregate delivering a +2.2% total return. Corporate investment-grade bonds produced a +2.4% total return…

02/01/25 | Chart of the Month

2025 Rate Cut Outlook: What’s Keeping the Fed on Hold?

In recent years, the Federal Reserve (Fed) carried out one of the fastest rate-hiking campaigns in history to bring inflation down from a multi-decade high. After holding rates high for over 12 months, the central bank started its current rate-cutting cycle in late 2024, lowering rates by a total of…

02/01/25 | Monthly Letter

Stocks Rally as Market Leadership Shifts in Early 2025

Monthly Market Summary The S&P 500 Index returned +2.7%, marginally outperforming the Russell 2000 Index’s +2.5% return. Seven of the eleven S&P 500 sectors outperformed the index, as AI-related news led to a sell-off in Technology stocks. Corporate investment-grade bonds produced a +0.6% total return as Treasury yields edged lower…

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