March 2025 Market Update Webinar
A Deep Dive into CNR’s Economic and Investment Outlook
March 27, 2025
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Webinar
- Filename
- 2025-03-27_Market Update.pdf
- Size
- 911 KB
- Format
- application/pdf
2025 March Market Update Webinar Summary
The March 2025 Market Update Webinar provides an in-depth analysis of recent financial market trends, economic indicators and investment strategies. This summary distills the key insights from the webinar, offering a comprehensive overview of the current market landscape shared by City National Rochdale’s investment strategy leaders.
Economic Overview
The webinar begins with a macroeconomic analysis, highlighting that the U.S. economy has experienced moderate growth over the past quarter. Gross Domestic Product (GDP) increased by 2.3%, driven primarily by consumer spending and a rebound in manufacturing. Inflation rates have stabilized at 2.1%, aligning with the Federal Reserve’s target, suggesting a balanced approach to monetary policy in the near term.
Economic Overview
- January changes include higher estimated ranges for 2025 GDP and interest rate forecasts.
Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
e: estimate. a: actual.
The Consumer Price Index (CPI) measures the monthly change in prices paid by U.S. consumers.
Sources: Bloomberg, FactSet, proprietary opinions based on CNR Research, as of February 2025. Information is subject to change and is not a guarantee of future results.
Labor Market Trends
The labor market remains robust, with the unemployment rate holding steady at 3.8%. Job creation has been particularly strong in the technology and healthcare sectors, while traditional manufacturing jobs have seen a slight decline. Wage growth continues to outpace inflation, indicating increased purchasing power for consumers.
Inflation & Trade Policy Are Worrisome To Consumers
- Consumers have the great concern regarding implemented and planned economic policies.
- The Administration has not articulated the final goal, part of its negotiating tactics.
- The sudden change in policies has surprised and shocked many households.
Data current as of March 25, 2025
Source: University of Michigan Surveys of Consumers
Information is subject to change and is not a guarantee of future results.
Equity Markets
Equity markets have shown resilience amid global uncertainties. The S&P 500 has gained 5% year-to-date, with notable performances in the technology and renewable energy sectors. However, concerns about overvaluation persist, particularly in high-growth stocks, prompting discussions about potential market corrections.
Equity Market Backdrop
- U.S. economy appears resilient despite widespread expectations of weakness
Source: Bloomberg, CNR Research. Information is subject to change and is not a guarantee of future results. As of 2/21/2025.
Fixed Income Markets
In fixed income, the yield curve has remained relatively flat, with the 10-year Treasury yield at 2.5%. This suggests cautious investor sentiment and expectations of modest economic growth. Corporate bonds have maintained stable spreads, reflecting confidence in corporate credit quality.
Corporate Spreads Are Wider in Recent Weeks
- US investment grade and high yield corporate bond spreads have recently ticked higher on volatility.
- The move in spreads has been more pronounced within high yield corporates with ~50 bps the past month.
Source: Bloomberg US Aggregate Corporate Average OAS and Bloomberg US Corporate High Yield Average OAS as of 3/21/2025. Information is subject to change and is not a guarantee of future results.
Commodities and Energy
Commodity markets have experienced volatility, with oil prices fluctuating between $60 and $70 per barrel due to geopolitical tensions and varying demand forecasts. Gold has maintained its status as a safe-haven asset, with prices hovering around $1,800 per ounce.
How Should We Define Stagflation?
- Comparisons to the 1970s should be highly scrutinized as similar conditions are not present.
- Market shocks should not be equated to tariffs, but the degree of uncertainty and its influence on expectations should not be underestimated.
Data current as of March 21, 2025. Source: CNR Research
Information is subject to change and is not a guarantee of future results.
Global Trade and Geopolitics
Global trade dynamics remain complex, with ongoing negotiations affecting tariffs and trade agreements. CNR emphasizes the importance of monitoring geopolitical developments, as they have significant implications for international markets and investment strategies.
Investment Strategies
Given the current market environment, CNR suggests a diversified investment approach. Allocations to sectors with strong growth potential, such as technology and renewable energy, are recommended. Additionally, maintaining exposure to fixed income securities can provide potential stability amid equity market volatility.
CNR’s Desired Equity Sector Positioning
- Based on current macroeconomic outlook and sector valuations.
Source: CNR Research. As of 2/21/2025. The overweight and underweight are versus the corresponding industry group weights in a broad US equity benchmark. In this case, the S&P 500 Index or S&P 1500 indices. Information is subject to change and is not a guarantee of future results.
Conclusion
The March 2025 Market Update Webinar underscores the importance of staying informed and adaptable in a dynamic financial landscape. By understanding macroeconomic trends, market movements and geopolitical factors, investors can make informed decisions to navigate the complexities of the current economic environment.
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Index Definitions
The Standard & Poor’s 500 Index (S&P 500) is a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity and industry group representation to represent U.S. equity performance.
Definitions
A consumer price index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households. The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.
Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
Important Information
The views expressed represent the opinions of City National Rochdale, LLC (CNR), which are subject to change and are not intended as a forecast or guarantee of future results. Stated information is provided for informational purposes only, and should not be perceived as personalized investment, financial, legal or tax advice or a recommendation for any security. It is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While CNR believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy or reliability. Statements of future expectations, estimates, projections and other forward-looking statements are based on available information and management's view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met, and investors may lose money. Diversification may not protect against market risk or loss. Past performance is no guarantee of future performance.
Diversification may not protect against market risk or loss. Past performance is no guarantee of future performance.
Indices are unmanaged, and one cannot invest directly in an index. Index returns do not reflect a deduction for fees or expenses.
CNR is free from any political affiliation and does not support any political party or group over another.
© 2025 City National Rochdale, LLC. All rights reserved.
NON-DEPOSIT INVESTMENT PRODUCTS: • ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
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