Market Update 2025

What is happening to the markets? The past couple of months have been a rollercoaster ride. Markets drop, and it feels like 24 hours later, they recover.

The US administration is dominating the headlines, which is a chaotic time.

For our wealth clients, you would have received two updates this month. The financial team and I are in daily discussions, monitoring our clients’ positions and making informed, experienced decisions to protect investments and take advantage of opportunities when they arise.

As the month draws to a close, I am taking this opportunity to provide an overview of our April report and encourage clients to keep the lines of communication open and to pick up the phone or email me before making any life-changing financial decisions.

Although the global message is not overly positive, in Australia, our economy grew by .6% in the December quarter, and our per capita DDP spiked upward for the first time in approximately two years. The US service sector indicated it was travelling well, and US inflation cooled during February to 2.8%.
China’s manufacturing sector is expanding rather than retracting over the same period.

While this is not a cause to pop the champagne corks, it does indicate that the global economy is not all doom and gloom. Rather than stalling, it is undergoing a period of recalibration.

We do have some reservations. Australia was anticipating gains in the job market in February this year; however, close to 52,000 jobs were lost. While the US services sector is gathering strength, its manufacturing sector is losing ground, and the pressure on inflation could escalate already-existing tensions on tariffs.

Trade policy is in uncharted waters, dampening business confidence and reducing investor confidence. While our position sees recovery is possible, it is a delicate balancing act that requires professional oversight and a diligent watch-and-act position.

Our highest percentage of probability indicates that the global economy will move forward. It will be slow, and it will be grinding. Growth will be hard won, however, inflation is manageable and liquidy support from central banks will help the market maintain an equilibrium. The big issue will be the US policy and its tariff strategy. Should the tariffs expand significantly or liquidity injections oscillate, we must reconsider.

Over the next one to three months, we plan to remain bolted to growth assets while reducing risk exposure. Flexibility is a tactical approach that means we will diversify and adapt as needed.
If an upheaval is brought on by crumbling economic demand, increased inflation, bank stress forcing a liquidity crunch, or geopolitical breakdown, we employ preservation over performance, aggressively targeting cash and defensive sectors such as healthcare and consumer staples.

While our data indicates a slow grind over the next quarter and that an upheaval is much less likely, there is a small chance that we will see a bull market. Global growth accelerates, the trade wars abate, and inflation softens further are all on the table. If this occurs, there is upside in equities, and with a disciplined approach to entry points and our flexibility to pivot, we will take advantage of these opportunities. However, timing is the key ingredient.

Economic cycles are a matrix and require experienced heads when things seem chaotic. As a wealth advisor, it is my role to interpret the data, make swing changes when required, and keep my clients fully informed. If you have any questions about managing your portfolio, please call me for clear, professional, and experienced advice.

You can read our full financial update report here

Our goal is to help you focus on long-term growth and wealth preservation.

Cayle Petritsch, Director and Wealth Advisor, is a leading financial advisor on Sydney’s North Shore. He has helped many Australians maximise their financial position and leverage opportunities, leading to sustained and profitable wealth accumulation. Contact Cayle today.