Hello Readers,
I hope everyone enjoyed the holidays. Fireside Charts is back after a brief holiday hiatus. If you missed our quarterly commentary, Priced for Perfection – S&P 500 Increasingly Dependent on the AI trade, I highly suggest you take a few minutes to read it. Although the year is still young, the content has already become increasingly relevant in the current market environment. I also expanded on a theme from the commentary that I found interesting in a special edition of Fireside Charts in Focus. If you missed it, please connect with me on LinkedIn where I post all of the Fireside Charts in Focus, along with other timely market commentary.
Thank you for being here,
Denis Rezendes, Portfolio Manager
Fireside Charts
2025 is off to an exciting start. Will the historical analogies hold true, or will 2025 be a year all its own? Companies are extremely optimistic about the future, but sometimes actions speak louder than words. The list of risks that fund managers are worried about looks very similar to past years. Businesses are expecting prices to rise in the short term. Global M&A. The average lifespan of an S&P 500 company.
1. Stocks are already expensive, but if they become more expensive it wouldn’t be the first time:
Source: @WSJ Read full article
2. Historically, it’s been abnormal for the average stock to trail the index by such a wide margin:
Source: @markets Read full article
3. So far, market breadth has improved in 2025:
Source: The Daily Shot 1/28/2025
4. The last time companies were similarly optimistic was following the covid vaccine breakthroughs in late-2020:
Source: BofA Global Research; @SamRo
5. But corporate insiders aren’t buying shares:
Source: @markets Read full article
6. A global trade war may cause yields to fall, but it’s possible that all three risks materialize in a bearish scenario:
Source: BofA Global Research
7. When businesses expect higher prices, they often materialize:
Source: The Daily Shot 1/28/2025
8. A new business friendly administration in the U.S. may lead to a resurgence of M&A:
Source: Goldman Sachs
9. It seems contradictory that the lifespan of S&P 500 companies has declined just while today’s market leaders are widely believed to be unassailable:
Source: BofA Global Research