Uncategorized

Global Economic Outlook: Mixed Signals 

Week December 15–19 

In a relatively calm week, employment and consumption indicators provided key signals across major economies. Central bank decisions continue to reflect a cautious, data – dependent approach, while global economies show divergences between production and consumption that reinforce the need for selective analysis heading into 2025.

United States 

  • Nonfarm payrolls exceeded expectations, adding 64,000 jobs in November. 
  • The unemployment rate rose to 4.6%. 
  • Headline inflation eased to 2.7% and core inflation to 2.6%. 

Europe 

  • The ECB held rates at 2.15% and revised its growth outlook. 
  • Eurozone inflation stood at 2.1%. 
  • Germany and Spain recorded 2.6% and 3.2%, respectively. 
  • The United Kingdom cut its policy rate to 3.75%. 

China 

  • Industrial production grew 4.8% year over year in November. 
  • Retail sales rose just 1.3%, the weakest increase since December 2022. 
  • Sharp declines in automobiles, household appliances, and construction materials. 

Argentina 

  • GDP expanded 3.3% year over year in 3Q, below expectations. 
  • Manufacturing output declined 2.4%. 
  • The unemployment rate fell to 6.6%, approaching historical lows. 

Brazil 

  • Economic activity declined 0.2% month over month. 
  • Agriculture helped prevent a deeper contraction. 
  • The central bank revised its GDP growth forecast upward and maintained a restrictive stance to contain inflation. 

Mexico 

  • Banxico cut its policy rate to 7%. 
  • Retail sales increased 3.4% year over year, driven by strong online sales. 
  • Employment in the sector rose 1%, while wages increased 3.3%. 

“The first rule of compounding: Never interrupt it unnecessarily.” — Charlie Munger 

Key Upcoming Events 

  • United States: Quarterly GDP growth release — December 23 
  • United States: Labor market data release — December 24 

Monitor 

Returns as of 10 AM EST 

Posted in UncategorizedTagged

Fed splits opinions and key data ahead 

Week December 8–12 

Markets reacted to the Federal Reserve’s latest rate cut amid a set of mixed signals on inflation, production, and employment across major economies. The week was shaped by U.S. labor data, an industrial rebound in Europe, and contrasting dynamics in Asia and Latin America, reinforcing a cautious outlook for monetary policy heading into 2026. 

United States 

  • The Fed cut rates to a range of 3.50%–3.75%, with three dissenting votes. 
  • Policymakers signaled only one additional adjustment in 2026. 
  • Labor cost growth moderated. 
  • Job openings remained stable, pointing to easing wage pressures. 

Europe (Germany) 

  • Industrial production rose 1.8% in October, the strongest increase since March. 
  • Growth was driven by machinery and electronics. 
  • Exports increased 0.1%, supported by intra-EU trade, despite weaker shipments to the U.S. and China. 

Japan 

  • Producer prices rose 2.7% year over year in November, unchanged from the previous month. 
  • The strongest increases were seen in nonferrous metals and food & beverages. 

China 

  • Annual inflation rebounded to 0.7%, the highest level since February. 
  • Food prices rose for the first time in ten months. 
  • Producer prices fell 2.2%, extending a 38-month contraction amid weak domestic demand. 

Brazil 

  • Annual inflation declined to 4.46%, its lowest level since September 2024. 
  • The Central Bank held its policy rate at 15.00%. 
  • Authorities signaled a prolonged pause to ensure convergence toward the inflation target. 

Mexico 

  • Inflation rose to 3.80% year over year, the highest reading since June. 
  • Auto production fell 8.4% year over year in November. 
  • Year-to-date, production is down 1.5%. 

“The single greatest edge an investor can have is a long-term orientation.” 
— Seth Klarman 

Key Upcoming Events 

  • United States: Nonfarm payrolls report — December 16 
  • United States: November inflation report — December 18 

Monitor 

Returns as of market close on December 11. 

Posted in Uncategorized, Weekly Summary

Market Outlook and Positioning

June 2025 

The expectation of fewer rate cuts and trade-policy uncertainty defined a volatile first half of the year. Recently, sentiment improved on the prospect of government agreements with its main partners. 

Key Market Highlights: 

  • Market Performance: 
    The S&P 500 and Nasdaq have reversed their April declines and now show year-to-date gains of approximately 3% and 2%, respectively. 
  • Monetary Policy & Valuation: 
    The Fed has held rates steady, reiterating that there’s no rush to resume cuts. The S&P 500’s forward P/E remains elevated at roughly 23×, versus a long-term average of 17×. 
  • Strategy & Positioning: 
    While the corporate backdrop could improve over the coming years, we have adjusted our tactical stance from positive to neutral on Large-Cap equities. 

Upcoming Events to Watch: 

  • Trade and fiscal policies under the new Trump administration 
  • Employment data releases and the potential timing of any rate cuts 
Posted in Uncategorized

Market Outlook and Strategy 

March 2025 

The beginning of 2025 has been marked by market volatility, driven by expectations of smaller benchmark rate cuts and the economic impact of the trade war under President Trump’s new administration. 

We share a summary of the key movements: 

Market performance 

In the U.S., the S&P 500 and Nasdaq are down 4% and 9% year-to-date (YTD), respectively, affected by monetary and tariff uncertainty. In contrast, the Euro Stoxx 50 has risen 12% amid the potential for a peace agreement in Europe, while China has rebounded by 24% due to stimulus measures and improved outlooks. 

Monetary policy and valuation 

In terms of monetary policy, U.S. inflation remains above the Fed’s target, prompting the market to adjust expectations, with between one and two 25 basis point (bps) rate cuts anticipated in 2025. Additionally, the S&P 500 valuation remains high, with a forward P/E of approximately 20.7x. 

Strategy and positioning 

We maintain our positive tactical stance on large-cap equities, although we anticipate episodes of volatility due to market sensitivity to tariffs and high valuations. 

Key events to watch: 

  • Tariff policies under Donald Trump’s new administration. 
  • Inflation trends and potential benchmark rate cuts ahead. 
Posted in Uncategorized

Global economic outlook: Key data from the United States, Europe, and more. 

Financial results and inflation key events so far this year. 

January 13th-17th Week 

The global economic outlook continues to provide crucial insights for understanding market trends. Here’s a summary of the most relevant data: 

  • United States: The Q4 2024 earnings season began with strong reports from JP Morgan, Citi, and other institutions. Meanwhile, inflation closed at 2.9% annually in December, in line with expectations, and retail sales advanced by 0.4%. 
  • Europe: The ECB may continue easing its monetary policy after four rate cuts last year. However, Germany’s economy has experienced two consecutive years of contraction.  
  • Japan and China: Japan is debating potential interest rate hikes, while China showed a recovery in exports with, a 10.7% annual growth. 
  • Latin America: In Mexico, the Plan México was introduced to attract strategic investments, while Argentina ended 2024 with a significant slowdown in inflation, dropping to 117.8% annually. 

Important Upcoming Events:

  • In the United States, Martin Luther King Jr. Day will be commemorated on 01/20. 
  • In the United States, consumer confidence indicators will be released on 01/24. 

Monitor 

Posted in Uncategorized

2025 Perspectives: Analysis of global markets and economic landscape

Discover our annual report ‘2025 Perspectives’ and the key insights for the upcoming year.

The final stretch of 2024 continues to reflect an outstanding performance in the markets, maintaining the positive trend that has prevailed throughout most of the year. This growth has been driven by several key factors that have strengthened global stability:

  • Disappearance of political uncertainty: The resounding victory of Donald Trump and the Republican wave in both chambers have paved the way for a more predictable political environment.
  • Interest rate reductions: The Federal Reserve has initiated a cycle of benchmark rate cuts, creating a favorable environment for investments.
  • Strong earnings performance: Corporate financial results have exceeded expectations, generating a positive balance for the year.

Looking ahead to 2025, the new political agenda is expected to focus on potential tax cuts, reduced regulation, and policies to stimulate the domestic economy. However, the implementation of these measures could present challenges, such as:

  • Trade tensions.
  • A higher public deficit.
  • Rising inflation and higher interest rates.

These factors may pose a challenge for the Federal Reserve, particularly in a context where inflation has slowed to levels more comfortable for the institution.

In this highly dynamic environment, we are pleased to present our annual report, ‘2025 Outlook’. In it, you will find:

  • The perspective of our Investment Committee on this economic scenario.
  • Expectations for each asset class and region.

We are confident this report will provide valuable insights into the next steps to take and how to optimize your investment strategies.

Posted in Uncategorized

The Fed cuts rates: Less future adjustments  

The Federal Reserve announced a rate cut but adjusted its projections to show less cuts in the coming years.

In a decision anticipated by markets, the Federal Reserve reduced its benchmark rate to a range of 4.25%-4.5%, returning to levels not seen since December 2022. However, the Fed’s message was clear: a more gradual path of adjustments is expected in the coming years. 

According to the “dot plot”, projections indicate only two additional cuts in 2025, half of what was expected in September. Two more adjustments are projected for 2026, and one more in 2027, with a long-term “neutral” rate estimated at 3%, reflecting a slight upward adjustment. 

Not all Committee members agreed: Beth Hammack, president of the Cleveland Fed, voted against it, continuing the line of dissent that began in November. This marks the first time since 2005 that such a level of opposition has been recorded among the governors. 

The Fed reaffirmed its commitment to monitoring economic data and adjusting monetary policy if necessary. This cautious approach will be key to continuing to balance growth and inflation in the months ahead. 

FED indicators update (December vs. September) 

 

Source: Federal Reserve 

Posted in Uncategorized, Weekly Comment
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