Market 2025 - Q3 Commentary

Market Overview | Recovery With Rotation

Global equities rebounded in Q3 as growth steadied, and sentiment improved. U.S. markets hit record highs, supported by fiscal stimulus from the One Big Beautiful Bill and strong AI-driven earnings in tech and consumer sectors. Europe’s fiscal expansion and China’s renewed stimulus boosted confidence and capital flows, signaling a global shift from policy fragmentation to coordinated fiscal growth.

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Macro Landscape | Inflection, Not Stagflation

Despite “stagflation” headlines, data show moderation, not stagnation. Employment softened slightly while inflation stayed contained. Tariffs are acting as a growth drag, not an inflation driver. Companies are managing costs, keeping margins stable. The Fed cut rates 25 bps in September, signaling a pivot toward supporting employment as inflation pressures ease.

Policy & Positioning | From Tightening to Tailwinds

Governments are now driving growth:

• US: Fiscal stimulus and deregulation sustaining investment momentum
• Europe: Major shift toward infrastructure and defense spending
• China: Targeted fiscal and credit support for tech and manufacturing
  Together, these trends underpin a multi-polar global recovery

Market Themes | AI and Productivity

AI remains a key growth engine. Investment is modest relative to GDP, and productivity benefits are beginning to emerge across industries. We view AI as a transformative, long-term driver that is comparable to electricity or the internet, rather than a speculative bubble.

Outlook & Strategy | Constructive but Selective

Recession risks remain low as inflation cools and liquidity improves. Fiscal coordination abroad and a weaker USD support international returns.

Portfolio focus:

• Gold for policy / geopolitical hedge
• International Equities for fiscal tailwinds
• Alternatives for diversification
• Innovation in AI and digital infrastructure

Conclusion | Global Breadth Returns

Markets are shifting from a U.S.-centric cycle to broader global expansion. Fiscal investment, improving productivity, and easing policy set the stage for a multi-year recovery. We remain constructive yet disciplined, focused on diversification, resilience, and selective global opportunity.

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