Summer is over, and we’re entering the final stretch of the year. Friday’s US jobs report was significantly worse than expected, and now we have 3 rate-cut expectations from the Fed back on the table, with some speculation of a 50-bp rate cut in September.
Inflation still remains on a mild upward trajectory, and this could definitely change the scenario as we head into the end of the year. Be that as it may, I think we can safely bet on at least 2 rate cuts in 2025, so we have the Fed’s easing bias.
Uncertainty continues to persist, however, with questions around tariff implementation, US GDP growth, and how the macro will transmit through earnings. Given this backdrop, we see five themes at the end of the year for US Equity Markets.
Lower borrowing costs improve balance sheets, boost private equity deal-making, and support corporate activity across sectors.
A softer US dollar lifts overseas revenues and margins, driving upward revisions for global-facing companies.
Fed easing, tax reforms, and stronger consumers align to support small-cap earnings and unlock long-awaited rotation potential.
Lower rates, central bank buying, and industrial demand create a supportive backdrop for gold and silver.
Entrenched platforms, scale advantages, and smart acquisitions position adaptive software firms to benefit from AI integration.
We present a deeper dive into each of these, along with 13 stock picks for these themes.