Insightful Ideas

President Trump’s return to office was marked by a ‘flurry’ of activity, where he delivered nearly 100 executive orders on Day One of his second term. As expected, Trump swiftly reversed many of the Biden-era policies and advanced many of his campaign pledges on immigration and border control, trade and tariffs, energy policy, the federal workforce, and other key priorities. Given the significant impact these executive orders can have on the economy and the financial markets, here are the top five questions we’ve been receiving after President Trump’s active first weeks.

US equities were higher in Q4, with the S&P 500 delivering a 2.4% return. One major highlight was that all 4 quarters were positive--the last time that happened was in 2021, and the markets ended the year with its 5th straight positive quarter. The quarterly return was the most muted of the four quarters. November delivered almost a 6% return—the best month of the year. The month was fueled by a 2.5% gain on November 6--following a smooth and uncontested election—the strongest post-election day performance dating back to 1928.

The Federal Reserve's recent actions and communications affect both the markets and economy, especially as we head into 2025. Following Fed Chair Jerome Powell's press conference stocks plunged with the S&P 500 declining three percent—it’s worst day since August. Let me break down the key points to help provide perspective.

As we reflect on 2024, it's worth noting how many anticipated challenges failed to materialize. Despite widespread concerns about recession, market downturns, and political instability, markets demonstrated remarkable resilience. Looking ahead to 2025, the focus shifts from extremes to equilibrium.

The investment landscape in 2024 has provided numerous bright spots for market participants. This exceptional performance comes against a backdrop of strong economic indicators, including moderated inflation, robust employment figures, and sustained GDP growth - all despite various challenges including Fed policy uncertainty, election dynamics, and global tensions.

Interest rates have been surprising many people lately. Even though the Federal Reserve is planning to lower rates, longer-term rates like the 10-year Treasury have actually gone up from 3.62% to 4.38%. This is happening because the economy is doing well and people potentially expect sticky inflation after the results of the election. What does this mean for your money?