Perspectives - December 23, 2025
The Corner December 2025
As we wrap up 2025, we see a continuation of our high-conviction view: we are still in a global secular bull market, even as the coming year looks to be more of a reset than a runaway rally. After a 100% gain off the 2022 lows and a powerful earnings cycle through 2025, we expect valuations to consolidate and volatility to rise. Our outlook is for the S&P 500 to trend toward 7500 in 2026, consistent with the historical pattern of mid-term election years and the decennial cycle. Beneath the surface, we believe the long-term runway is intact, with the secular trend pointing to 10,000-13,000 for the S&P 500 by the end of the decade. December has all but reinforced our view that the year ahead will be defined by three key market forces: a reset in Technology and Growth leadership, the acceleration of global equity markets within their own secular bull trend, and the ongoing impact of innovation-driven productivity gains. Technology and Tech-related industries – especially Semiconductors – remain the dominant engines fueling corporate profitability, but returns have been extraordinary and will likely consolidate before the next higher level. At the same time, non-U.S. equities have broken out to new secular highs, offering more attractive valuations and emerging opportunities for diversified portfolios.
Market Commentary - December 15, 2025
A Dovish Hawkish Rate Cut
The FOMC (Federal Open Market Committee) concluded its regular monetary policy meeting last Wednesday and announced a highly anticipated and eagerly awaited rate cut. It agreed to cut the Federal Funds rate cut by 25 bps to 3.50%–3.75%. But the Committee is not expecting many more interest rate cuts into 2026 – this was the hawkish side of their announcement and action. Separately, the Fed ended Quantitative Tightening (QT) on December 1, halting the runoff of securities from its balance sheet – a process that had been draining liquidity from financial markets. At the FOMC meeting, the Fed also signaled a willingness to provide additional liquidity by purchasing Treasury bills, reflecting seasonal funding pressures, which tend to put upward pressure on interest rates as businesses wind down activity toward year-end.
Perspectives - December 15, 2025
Chartbook November 2025
Following months of strong returns, global equities took a pause in November. During this period, the S&P 500 Index eked out a modest 0.3% gain amid a relatively positive backdrop of robust corporate earnings, rising expectations for interest rate cuts in the near term, and an end to the longest U.S. government shutdown on record. Despite these tailwinds, concerns around elevated valuations and AI-related spending dominated sentiment, putting significant pressure on growth stocks relative to value.