Peak Uncertainty - A Tumultuous Start to 2025
03.06.25 | Executive Summary:
The first two months of 2025 have been anything but smooth. The S&P 500 has erased all post-election gains, wiping out $3.4 trillion in market value. Market breadth has deteriorated, risk appetite is fading, and uncertainty remains high. With policy shifts, inflation concerns, and geopolitical tensions at the forefront, capital preservation is key.
Key Takeaways:
- Post-Election Gains Erased: The S&P 500 hovers near its 200-day moving average, a critical technical level.
- Market Breadth is Weak: Narrow market leadership is a warning sign, with valuations near all-time highs.
- Policy Uncertainty Nears Record Levels: Investors are grappling with rising tariffs, inflation pressures, and capital outflows into European equities.
- Sentiment Remains Extremely Negative: While fear is rising, a full capitulation phase—a hallmark of market bottoms—has yet to materialize.
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