BFG Newsletters

Volatility returned last week due to trade tensions and a sudden geopolitical shock, even though economic data showed moderating growth and lower inflation. In this commentary, we break down the key developments, from Washington to the Middle East, and discuss what they mean for markets, interest rates, and long-term investors.

Markets Rebound Sharply, but Policy Uncertainty Remains

Equity rebound and the importance of staying invested.

Comments on the recent market sell-off.

Comments on the recent market sell-off.

Markets Navigate Economic and Policy Uncertainty in February – Stocks and Bonds Move in Opposite Directions Amid Market Rotation.

There was no shortage of market-moving events during a very active fourth quarter. The stock market opened the quarter with a slow start in October, but the outcome of the presidential election triggered a broad rally in November. The rally faded as the year ended, although the S&P 500 was only a few percentage points below its all-time high. The bond market was equally active in the fourth quarter, with the Federal Reserve cutting rates by another 0.50%, bringing the sum of rate cuts in 2024 to 1.0%.

The election is over, and global markets are analyzing the outcome and starting to adjust portfolios. Republicans are set to control the White House, Senate, and House, but the results are also notable for a historical reason: the president-elect, Donald Trump, is returning to office after a previous election loss—a rare political comeback not seen since Grover Cleveland in 1892. As a result, investors are looking to Trump’s first term as a roadmap for how his next administration’s policies may impact markets.

The election is over, and global markets are analyzing the outcome and starting to adjust portfolios. Republicans are set to control the White House, Senate, and House, but the results are also notable for a historical reason: the president-elect, Donald Trump, is returning to office after a previous election loss—a rare political comeback not seen since Grover Cleveland in 1892. As a result, investors are looking to Trump’s first term as a roadmap for how his next administration’s policies may impact markets.

Stocks moved higher this past week, with most gains occurring in the post-election period. The S&P 500 hit a new record, approaching the significant 6,000 level, as investors priced in expectations for the incoming administration’s pro-growth, reflationary policies. Small caps led the advance, followed closely by growth and high-beta stocks.