Market Commentary: Bird’s Eye View for Q1 2025

Last year became the second straight year with 20%+ gains for U.S. stocks—once again led by large-cap growth stocks. This quarter’s Bird’s Eye View video puts that into historical context and asks what history suggests we might expect for 2025.

Other key themes this quarter include:

• High stock-market valuations and forward-looking earnings considerations point to a near-zero equity risk premium (the extra return an investor can expect from equities over bonds).
• On its own, a low equity risk premium would point toward opportunities in bonds. However, correlations between stocks and bonds have been rising.
• The Fed’s progress fighting inflation has stalled—and consumers are facing serious pocketbook impacts.
• There could well be a productivity miracle thanks to AI, but its impacts may be several years off.

In the eight-minute video, Frank J. Esposito, CFA, Managing Partner at EverNest, also zeroes in on small-cap stocks, commodities—including gold—international stocks, and the changing political landscape.

An index is an unmanaged portfolio of specific securities, the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Investors cannot invest directly in an index. An index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown.

The information herein was obtained from various sources. EverNest does not guarantee the accuracy or completeness of information provided by third parties. The information in this report is given as of the date indicated and believed to be reliable. EverNest assumes no obligation to update this information, or to advise on further developments relating to it.