BGS Advising

Markets delivered a strong performance in June, with the S&P 500 rising 3.2%, the Dow Jones Industrial Average up 2.6%, and the Nasdaq gaining 4.1%. The rally was driven by softening inflation prints, resilient labor market data, and a growing consensus that the Federal Reserve may hold rates steady through the end of the year. While the economic data pointed to a “soft landing” narrative gaining traction, market leadership remained concentrated in a narrow group of technology and AI-linked names, raising questions about the sustainability and breadth of the advance. Overall, investor sentiment in June was underpinned by the belief that rate hikes are largely behind us, but valuations in certain sectors are beginning to reflect more optimistic outcomes.

Among the more notable developments this month, Comcast agreed to divest Sky Deutschland to RTL Group for $617 million, signaling a retreat from an underperforming European media asset. In New York, Caesars Entertainment proposed converting 1515 Broadway — home to the Times Square Paramount Building — into a casino and luxury hotel, in partnership with SL Green and Roc Nation. The proposal reflects an emerging trend of repurposing prime urban real estate toward experiential and gaming-driven use cases. Amazon also made headlines by piloting a $10/month grocery subscription service for Prime members, highlighting ongoing experimentation with bundling and recurring revenue models in physical retail. In the private markets, KKR’s $325 million take-private of cybersecurity firm Appgate demonstrated sustained sponsor interest in recurring-revenue software platforms despite a quieter M&A environment overall.

Elsewhere, deal activity in the infrastructure and industrial sectors offered insight into shifting strategic priorities. Dominion Energy announced the sale of its Ohio natural gas utility to Enbridge for $6.6 billion, reflecting ongoing utility portfolio reshuffling amid regulatory and decarbonization pressures. In the travel sector, Airbus raised its 2025 aircraft delivery target to 800, citing stronger-than-expected airline demand despite persistent supply chain headwinds — a datapoint that aligns with continued strength in global air traffic. Meanwhile, in real estate, Blackstone-backed Tricon Residential noted in its investor day that it sees a long runway for institutional investment in U.S. single-family rentals, supported by housing undersupply and demographic tailwinds. Taken together, these developments reflect the broader market theme of capital reallocating toward long-duration assets and secular growth exposures.

Equities regained their footing in May, with the S&P 500 advancing ≈ 6.2 %—its best month of the year—after April’s pull-back. The rebound was broad-based but led by megacap technology: investors leaned back into the AI narrative and defensives rotated out of early-cycle industrials. The index closed the month at 5,925, recapturing the late-March highs.Rates provided a supportive backdrop. Ten-year Treasury yields drifted roughly 15 bp lower through mid-month, testing 4.26 % before finishing near 4.41 %, as softer-than-expected inflation and the Fed’s “on hold” tone calmed fears of an imminent re-steepening. Credit spreads tightened 8–12 bp across investment-grade, and primary issuance reopened for BBB industrials—an important risk-appetite tell.

Inflation continued to cool. Headline CPI rose just 0.2 % m/m (2.4 % y/y) while core eased to a 0.1 % print, its smallest gain since January. Shelter was the only major category still running hot; energy provided a welcome drag as gasoline fell 2.6 % m/m. The data helped the FOMC leave policy unchanged at 4.25 – 4.50 % and reiterate a “data-dependent, patient” stance. May’s rally was front-loaded by chipmakers after several bulge-bracket houses published bullish FY-26 data-center capex surveys. Nvidia’s fiscal-year results—reported late April—showed revenue more than doubling; that momentum carried into May and set the stage for its eventual $4 tn valuation milestone in early July. Oil’s demand overhang: Brent crude averaged just $64.5/bbl in May, its weakest level since 2021, as larger-than-expected OPEC+ supply and headline noise around new U.S. tariffs softened the demand outlook. 

We enter the second half with markets again pricing two Fed cuts by December and equity multiples sitting at cycle highs. While the cooling inflation trend underpins that optimism, we are mindful that a re-acceleration in shelter or a disorderly move in long-end yields could challenge the narrative. We will continue to monitor early-Q2 earnings pre-announcements and the June CPI print (due July 15) for confirmation that the disinflation path—and the rally—remain on track.

Markets traded sideways in February as investors digested a mix of macroeconomic signals and sector-specific developments. The S&P 500 saw minor fluctuations, closing the month near flat, while the Nasdaq lagged due to underperformance in large-cap tech. Economic data pointed to steady consumer spending but also revealed stickier-than-expected inflation in services, complicating the Federal Reserve’s rate path outlook. Fed officials maintained a cautious tone, signaling that while rate cuts may still be on the table later in the year, persistent core inflation could delay any meaningful easing.

One of the more notable corporate stories this month was FedEx’s strategic debt restructuring, where the company paid bondholders a fee to remove its freight business as a guarantor. This move is widely seen as a precursor to a potential spinoff of the freight division. In doing so, FedEx could unlock valuation upside, particularly if its remaining express and ground operations are re-rated in line with peers like UPS. The freight divestiture mirrors broader industry trends as firms refocus on more stable and scalable segments with less cyclicality.

Elsewhere, DoorDash came under pressure, agreeing to a $16.8 million back pay settlement with New York couriers after revelations it had used customer tips to subsidize base pay. The controversy weighed on shares and renewed scrutiny around tipping transparency and gig economy compensation. Despite the backlash, DoorDash maintains dominant U.S. market share, though continued legal and reputational risks could challenge its pricing power in a margin-sensitive industry.

Markets entered 2025 with tentative optimism but were ultimately defined by volatility and rising geopolitical risk. After a strong close to 2024, the S&P 500 wavered in January, with early gains reversing by month-end. On January 23rd, the index briefly touched a record high of 6,118.71 before retreating in the final week. A sharp shift in sentiment followed earnings disappointments from major tech players, and escalating trade concerns weighed heavily. Apple’s mixed earnings initially lifted tech sentiment, but enthusiasm faded by month-end as the market began to price in the looming threat of tariffs.

The primary macro focus shifted to potential trade disruptions, particularly following former President Trump’s renewed threat of a 25% tariff on imports from Mexico and Canada, unless immigration enforcement targets were met. Analysts noted that this could push U.S. inflation back to 3%, reversing progress made in late 2024. Auto manufacturers like GM and Ford were especially vulnerable, with Evercore estimating up to a 50% EPS hit for some firms if tariffs materialized. Meanwhile, the steel industry stood as an unexpected beneficiary, vocally supporting the tariffs as a way to counteract underpriced imports from global competitors.

Beyond trade, gold futures climbed to new highs amid a confluence of global uncertainties. Investors turned to safe-haven assets as geopolitical tensions with China escalated. Inflation data was somewhat reassuring in the short term—PCE inflation ran at an annualized rate of 2.2% over the prior three months, inching closer to the Fed’s target. However, the possibility of tariff-driven inflation has complicated the outlook for rate policy, adding another layer of caution to the market’s early-year positioning.

Markets ended 2024 on a strong note, with the S&P 500 rallying nearly 4.2% in December to close out the year at record highs. Risk sentiment improved markedly as inflation cooled and the Federal Reserve signaled a potential policy pivot in 2025. The 10-year Treasury yield declined meaningfully during the month, falling below 4% for the first time since summer, supporting a broad-based rally across equities and credit. Small caps and cyclicals outperformed in the final weeks, suggesting growing investor confidence in a soft landing scenario heading into the new year.

A major driver of the rally was the dovish tone at the Fed’s final policy meeting of the year. While rates were held steady, the updated dot plot showed a majority of committee members projecting three rate cuts in 2025, sparking a surge in rate-sensitive assets. Inflation data also helped ease concerns—core PCE came in below expectations, continuing a multi-month trend of disinflation across goods and services. Labor market data remained stable, providing a backdrop of economic resilience without triggering overheating fears.

Among the most discussed stories was the blowout quarter from Nvidia, whose surging AI infrastructure revenue reaffirmed its dominant position in the semiconductor space and added fresh fuel to the broader AI trade. Elsewhere, the IPO calendar quietly reawakened, with several venture-backed firms testing the public markets late in the quarter—though with more caution and flatter valuations than during previous cycles. In the auto sector, Tesla’s long-delayed Cybertruck finally began limited deliveries, generating significant media attention but mixed reviews from analysts. Taken together, December ended the year on an optimistic note, with momentum across both macro and micro drivers poised to carry into early 2025.

Inflation continued to cool. Headline CPI rose just 0.2 % m/m (2.4 % y/y) while core eased to a 0.1 % print, its smallest gain since January. Shelter was the only major category still running hot; energy provided a welcome drag as gasoline fell 2.6 % m/m. The data helped the FOMC leave policy unchanged at 4.25 – 4.50 % and reiterate a “data-dependent, patient” stance. May’s rally was front-loaded by chipmakers after several bulge-bracket houses published bullish FY-26 data-center capex surveys. Nvidia’s fiscal-year results—reported late April—showed revenue more than doubling; that momentum carried into May and set the stage for its eventual $4 tn valuation milestone in early July. Oil’s demand overhang: Brent crude averaged just $64.5/bbl in May, its weakest level since 2021, as larger-than-expected OPEC+ supply and headline noise around new U.S. tariffs softened the demand outlook. 

We enter the second half with markets again pricing two Fed cuts by December and equity multiples sitting at cycle highs. While the cooling inflation trend underpins that optimism, we are mindful that a re-acceleration in shelter or a disorderly move in long-end yields could challenge the narrative. We will continue to monitor early-Q2 earnings pre-announcements and the June CPI print (due July 15) for confirmation that the disinflation path—and the rally—remain on track.

Markets staged a sharp rebound in November, with the S&P 500 climbing over 8% for its strongest monthly gain since mid-2020. The rally was fueled by cooling inflation data, improving earnings sentiment, and growing confidence that the Federal Reserve was done raising interest rates. Treasury yields fell meaningfully, with the 10-year yield dropping from above 4.9% to finish near 4.3%, providing a powerful tailwind to rate-sensitive sectors. Equities rallied across the board, led by technology, real estate, and small caps, while volatility retreated to multi-month lows.

The October CPI report was a key turning point. Headline inflation came in softer than expected, with shelter and goods prices easing and core inflation advancing only marginally. Markets quickly repriced the outlook for monetary policy, moving from a higher-for-longer stance to anticipating the start of rate cuts by mid-2025. The Federal Reserve struck a neutral tone in its public remarks, acknowledging the progress made while leaving room for flexibility should inflation reaccelerate. Credit spreads tightened in response, and corporate issuance picked up into month-end.

On the corporate front, earnings season wrapped with mixed results but an improved tone. Big-box retailers like Walmart and Target delivered resilient performances despite cautious consumer commentary, suggesting continued strength in discretionary spending. In the tech space, Microsoft’s announcement of Sam Altman’s return to OpenAI—after a brief and highly publicized boardroom shakeup—reassured investors about leadership stability in the generative AI space. Meanwhile, speculation around M&A returned to the spotlight, with reports of strategic interest in several software and industrial names, hinting at a possible pickup in deal flow if financial conditions continue to ease into year-end.

Markets retreated in October as a surge in Treasury yields and geopolitical tensions weighed heavily on sentiment. The S&P 500 fell approximately 3%, marking its third straight monthly decline, while the Nasdaq fared slightly worse due to underperformance in rate-sensitive tech names. The 10-year Treasury yield breached 5% for the first time since 2007, driven by strong labor data, resilient consumer spending, and a string of hawkish Fed remarks. Higher real yields pressured equity valuations and contributed to a tightening of financial conditions across the board.

The macro backdrop became more fragile as renewed conflict in the Middle East escalated following a large-scale attack by Hamas on Israel. The humanitarian and strategic uncertainty sent oil prices briefly above $90/bbl before retracing on signs of limited regional supply disruption. Markets remained alert to the risk of broader contagion, though fundamentals in energy and defense stocks found support amid the turmoil. At the same time, U.S. economic data surprised to the upside, with Q3 GDP advancing at an annualized 4.9% pace—well above consensus—further complicating the monetary policy outlook.

Corporate earnings were mixed, with several high-profile disappointments in consumer tech and media. Alphabet missed top-line expectations, triggering a sharp selloff, while Amazon and Meta offered more upbeat guidance that helped stem broader declines. The “Magnificent Seven” stocks, which had driven much of the year’s gains, began to diverge in performance. Meanwhile, capital markets activity remained subdued: IPOs were sparse, and M&A remained muted amid rising borrowing costs. October closed with growing tension between strong economic prints and tightening liquidity—a dynamic likely to define the months ahead.

Inflation continued to cool. Headline CPI rose just 0.2 % m/m (2.4 % y/y) while core eased to a 0.1 % print, its smallest gain since January. Shelter was the only major category still running hot; energy provided a welcome drag as gasoline fell 2.6 % m/m. The data helped the FOMC leave policy unchanged at 4.25 – 4.50 % and reiterate a “data-dependent, patient” stance. May’s rally was front-loaded by chipmakers after several bulge-bracket houses published bullish FY-26 data-center capex surveys. Nvidia’s fiscal-year results—reported late April—showed revenue more than doubling; that momentum carried into May and set the stage for its eventual $4 tn valuation milestone in early July. Oil’s demand overhang: Brent crude averaged just $64.5/bbl in May, its weakest level since 2021, as larger-than-expected OPEC+ supply and headline noise around new U.S. tariffs softened the demand outlook. 

We enter the second half with markets again pricing two Fed cuts by December and equity multiples sitting at cycle highs. While the cooling inflation trend underpins that optimism, we are mindful that a re-acceleration in shelter or a disorderly move in long-end yields could challenge the narrative. We will continue to monitor early-Q2 earnings pre-announcements and the June CPI print (due July 15) for confirmation that the disinflation path—and the rally—remain on track.

Markets ended the third quarter on a cautious note, with the S&P 500 falling roughly 4.8% in September as rising bond yields and a more hawkish Federal Reserve reset investor expectations. The 10-year Treasury yield rose steadily throughout the month, approaching 4.7% by quarter-end—its highest level since 2007. The move higher in rates reflected both resilient economic data and growing concerns over persistent inflation in key service sectors, prompting the Fed to reaffirm its “higher for longer” posture in its September meeting. Equities broadly pulled back, led by growth and interest-rate sensitive sectors like technology and real estate.

September’s FOMC meeting was a key inflection point. While the Fed held rates steady, the updated Summary of Economic Projections showed a more aggressive dot plot, with fewer cuts projected in 2025 and the median 2024 policy rate raised to reflect a more persistent inflation outlook. This shift caught markets off guard, particularly given the solid labor market and GDP revisions earlier in the month. The Fed’s message was clear: policy would remain restrictive until there is sustained progress on core inflation, especially in services and housing.

In corporate developments, the auto sector came under pressure as the United Auto Workers launched a targeted strike against the Big Three U.S. automakers. The union’s demands for higher pay and job protections in the EV transition highlighted growing labor tensions across industrials. Meanwhile, Instacart and ARM Holdings completed closely watched IPOs, both of which debuted strongly but traded down by month-end, reflecting investor caution toward richly valued new listings. The weakness in recent tech IPOs served as a barometer for broader risk appetite, which remained under pressure as financial conditions tightened.

Markets ended August in mixed territory, with the S&P 500 rising modestly after recovering from early-month losses tied to rate volatility and seasonal softness. Investor focus remained locked on inflation dynamics and Fed signaling, particularly after July’s CPI print came in marginally hotter than expected. While headline inflation showed signs of stabilizing, underlying services inflation remained sticky, leading to a reassessment of the Fed’s policy path heading into the fall. The 10-year Treasury yield briefly surpassed 4.3% before easing in the final week, helping support a modest equity rebound into month-end.

Jackson Hole was the month’s centerpiece, where Fed Chair Powell struck a measured tone. While he acknowledged progress on disinflation, he reiterated the need to remain vigilant and left the door open to additional rate hikes should inflation reverse course. Markets interpreted the remarks as balanced but firm, with futures pricing in a higher likelihood of one final hike before year-end. Risk assets initially sold off on the speech but regained footing as investors digested the Fed’s preference to avoid overcorrection.

Sector performance diverged meaningfully. Energy outperformed as oil prices climbed back above $85/bbl on tighter inventories and renewed geopolitical risk. Meanwhile, consumer discretionary lagged amid cautious back-to-school spending data and signs of softening in middle-income consumption. In corporate news, Apple made headlines by pulling the plug on its electric vehicle initiative after nearly a decade of investment—signaling a strategic return to core high-margin hardware and services. August closed with a tone of guarded optimism, as markets weighed the Fed’s evolving stance against resilient but uneven economic momentum.