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Perspectives

Our Latest Thinking + Important Facts

by Fortem Financial April 28, 2025

To the extent to which forecasts on the financial markets have largely been reduced to our collective reactions to utterances of policymakers who may or may not know any more than the rest of us, we’ve decided to keep things simple – presenting our base case as well as some facts we believe you should know:

 

Base Case:

  1. Recession odds are 45% in 2025 due to increased uncertainty regarding global trade and concomitant impact on capital spending/deal-making
  2. Unemployment claims (low), corporate credit spreads (still relatively tight), and corporate profits (rising) all suggest positive economic growth now
  3. Our research partner Strategas earnings estimates are lower than the Streets, but still expecting growth of +4% in 2025 ($255). 4.5% 10-yr. US Treasury yields redline for risk
  4. Inflation could be “sticky” due to deficits, pent-up wage demands, deglobalization, and immigration
  5. The Fed likely to ease but perhaps not as much as investors hope for → penchant for shorter duration equities that generate cash above debt payments paramount
  6. Major themes are: (1) deglobalization; (2) cash flow “aristocrats;” (3) A.I., and, (4) industrial power revolution
  7. Tighter trade policy puts more pressure on Administration to ease fiscally and regulatorily
  8. Artificial intelligence, crypto mining, Electronic Vehicles, higher global standards of living, and a desire to bring manufacturing back home all greatly increase the need for electricity and grid modernization. It also makes a reliance on fossil fuels greater in the short term
  9. Favor Large Cap Value over Growth. Favor Financials, Energy, Utilities, & Industrials sectors
  10. High-quality small companies vs. broader Russell 2000 exposure to small cap companies. Underweight Fixed Income with cash allocated to Gold

 

POTENTIAL BULLISH CATALYSTS FOR STOCKS

  1. The announcement of a trade deal with current major trading partner (Japan, India, Europe, China) – agricultural goods & LNG exports will be key
  2. The Fed is likely to start easing in June
  3. Signs of major progress on a new fiscal package that preserves a large part of the Tax Cuts and Jobs Act (current tax plan)
  4. Companies too uncertain to lay off staff or cancel already approved capital spending
  5. A tweak in the SLR (Supplementary Leverage Ratio) that relieves any upward pressure on Treasury yields

Source: Strategas

 

Market and Index Changes for the Week Ending 4/25/2025

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by Refinitiv.

 

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

 

Latest News

 

Asia shares edge up; dollar at mercy of US trade whims

Asian share markets and the dollar made a cautious start on Monday as confusion over U.S. trade policy showed little sign of easing, in a week packed with major economic data and mega-tech earnings.

Reuters

Read Story

 

China holds off on new stimulus, shows composure in US trade war

China has advanced this year's stimulus plans but is holding off on fresh measures as it tries to maintain composure, betting on Washington blinking first in a protracted trade war.

Reuters

Read Story

 

Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client’s experience or of the Firm’s future performance. Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
Fortem Financial 2016. All rights reserved.

Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Forward looking statements are based on current expectations and assumptions, the economy, and future conditions. As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict. Actual results may differ materially from the anticipated outcomes. Carefully consider investment objectives, risk factors and charges and expenses before investing. Fortem Financial is a registered investment adviser with the SEC. Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

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