28 AUGUST 2025
Heady earnings growth, toppy profit margins and a relatively expensive US equity market all need the outlook to remain rosy.
So far, so good, with inflation largely under control and the potential for rate cuts to ease both the cost of living burden for consumers and the refinancing challenge for businesses.
Of course, the tricky part is timing it right, so that inflation is not only tamed but a recession is also avoided.
The chart below shows the performance of the S&P 500 from 1990, with recessions highlighted by the grey bars. If the central bankers (and increasingly, politicians) do get it right, all will be well. If not, then the unemployment rate will start to rise, at which point some of the market’s current expectations will need re-adjusting.
The content of this communication is for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed and opinions given are correct but cannot guarantee replication of depicted performance. Viewers intending to take action based upon the content of this communication should first consult with the professional who advises them on their financial affairs. Capital invested will be at risk, and you may get back less than you invest. The past is not a reliable indicator of future performance. Neither the publisher nor any of its subsidiaries or connected parties accepts responsibility for any direct or indirect loss suffered by a recipient as a result of any action or inaction, in reliance upon the content of this communication.
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