MARKET OVERVIEW

As of Close of 1st Quarter 2025

Market Recap

US equity markets start the year lagging other assets with the Russell 2000 index dropping roughly 10%. Market volatility is due to uncertainties surrounding tariffs and global prices.
Bonds rally in the 1^st quarter as the Federal Reserve maintains a wait and see approach for further interest rate cuts. Money flowed into bonds as a flight to safety while investors are locking in higher yields for the long term.
Crude oil remains relatively flat for the 1^st quarter while gold and silver continue to a strong run upwards.
A new US president was sworn into office and with change comes uncertainty. The markets are digesting the regime change and new policies that may lay ahead.

We expect volatility to persist in the coming months. Uncertainty will be the main factor for market movements, we will continue to be patient and monitor economic situations for prospective investment changes. We favor equities over bonds for the year 2025.
2-3 more interest rate cuts are expected with a slightly better than 50% chance of that happening by 4^th quarter of 2025. With a steepening yield curve, we will look for opportunities to extend duration to capture attractive rates.
As credit spreads widen, corporate debt becomes more attractive vs the treasury and we will look to add high quality credits to portfolios.
We anticipate the Trump tariffs to dominate the market headlines leading to investment opportunities as investors continue to be split on their opinions of how the tariffs will affect the economy. We will be prudent during these current times of uncertainty.