Olivia Geldenhuys

Tariffs have dominated the narrative for 2025 but the US economy has proved more resilient than was feared. Even with the latest labour market weakness, there is little chance of a recession in the next few months. Coming into the end of the year, monetary liquidity should benefit from the US Federal Reserve’s interest rate cuts. As financial condition ease this will eventually support global economic activity.

In fixed income, we think there is room for long-term bond yields to fall even further as interest rates fall across the developed world. In Equities, the biggest differentiator in performance this year has been small versus large. Due to expectations of lower interest rates and hence cheaper borrowing, small cap stocks have performed better. If businesses are positive, investor optimism will be well-founded.

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