Markets are supported by a broad foundation of easing monetary policy, fiscal support, and sustained investment in productivity-enhancing technologies, such as AI. Volatility and periodic pullbacks should be viewed as opportunities rather than warnings.

Markets are balancing optimism with realism as economic conditions remain broadly supportive. Yet, valuations, concentration, and the sustainability of AI-driven momentum are warranted and thus we believe thoughtful diversification is the way forward.

At his core, Trump is a mercantilist…like it or not, low interest rates, a weak dollar and protectionism are foundational to his economic view. But Trump is no idealogue. What he says today may very well be reversed tomorrow. And that flexibility was amongst the reasons why we remained constructive.

The “Big Beautiful Bill” has plenty of pro-growth provisions but the bill is not without its flaws. We argue that its overall merit outweighs its imperfections and are hopeful that Congress won’t let perfect become the enemy of the good.

Trump 2.0 requires investors to evaluate the potential effect of tariffs, DOGE, budget reconciliation, Ukraine and other policy initiatives. Given this firehose of Trump Administration proposals, the policy uncertainty variable has increased causing market participants to retreat and pullback on risk.

The US economy remains solid and there is a growing enthusiasm for the potential of Trump’s fiscal policies. While positive on the prospects of technology companies, we anticipate that economic fundamentals and valuations may favor underappreciated investments in smaller capitalization stocks along with value-oriented sectors and companies.

Will America be able to say in four years that we are better off than we are today? To do so, President-elect Trump must implement his economic agenda effectively, and that agenda must deliver tangible results. Given a myriad of challenges, it remains uncertain how smoothly implementation will proceed.

Today, the economy is cooling yet a recession seems to be a low likelihood event.  Slowing but solid economic growth, falling inflation and interest rates seem to be leading us to a goldilocks economy which will continue to delight investors.

2Q24 was driven by AI euphoria and strong corporate earnings. US stocks led, with the biggest technology stocks especially strong. The big question for investors going forward is are they too late to the AI party or will this trend of concentrated returns, largely driven by technology, continue?

Productivity enhancements, led by AI, may be the key variable in equity price appreciation going forward. Margin benefit from AI driven activity should broaden out across the corporate sector and be reflected in the stock price appreciation across an increasing number of companies.

We take a look at the market impact of historical elections as well as what we can expect from the current election. Spoiler alert, expect somewhat higher volatility but the U.S. economy will continue to be the global innovation engine providing a solid foundation for the stock market.

Despite a steady drumbeat of negativity, 2023 proved to be an extraordinarily good time for markets in the United States. In hindsight, falling inflation, strong economic growth and improving earnings are a recipe for outsized equity market performance,

Higher tax rates, increased regulations, greater government intrusion and an industrial policy are not the ingredients for faster economic growth, in our opinion. We look for 2024 real GDP growth rate to be lower than 2023, more likely in the 1.5% to 2% range.

The Democrat’s claim that bad messaging is to blame for Biden’s low approval rating. But Bidenomics as economic policy could be the real issue. Ignoring the substitution effect of tax increases will further increase the federal deficit and debt.

Yes, Trump pursued some of Reagan’s conservative policies…However, the two leading presidential candidates economic policies are similar in other ways, especially in favoring special interest groups, and will make America worse off.