Dear Investors,
If you’re anything like me, you’re probably wondering: Where are the markets going?
What should I really be doing with my money right now?
Let me start by saying this – 2025 isn’t a repeat of 2020. It’s not even 2022.
We’re in a new cycle, and while the headlines are loud, the real opportunities are often quiet, hidden in the details.
As a global macro investor, I’ve been analyzing what’s beneath the surface.
I’ve tracked the data, followed the institutional commentary, and studied the signals. My core conviction? This is not a year for fear – it’s a year for bold, strategic action.
Whether it’s the resilience of the U.S. economy, the reawakening of international equities, or the quiet revolution in private credit, there’s more happening than meets the eye.
So let’s dive into it – clearly, simply, and with conviction.
I want to help you see what I see, and hopefully, give you the confidence to navigate this moment with purpose.
The U.S. Economy: Macro Resilient, Not Recessionary
Let’s cut through the noise. The U.S. economy started 2025 on uneven footing.
January’s extreme weather, a spike in tariffs, and political posturing didn’t help consumer sentiment.
But growth? Still alive and kicking.
GDP expectations have slipped from 2.1% to 1.4% – a decline, yes, but hardly a collapse.
In March, 275,000 new jobs were added. Weekly jobless claims hover around 215,000. Those aren’t recession numbers.
Real disposable income is climbing. Final sales to domestic purchasers – a key demand metric – is running above 3% in most recent quarters, compared to a 30-year average of 2.7%.
Consumers are still spending, especially in services, and pent-up demand from late 2024 is now trickling into spring activity.
Consumer sentiment, especially among upper-income earners, dipped earlier in the year, but the labor market is offering a backstop.
Wage growth is still outpacing inflation, and while retail sales were uneven in Q1, the housing market is beginning to stabilize thanks to lower long-term interest rates.
Add it all up, and what do you get? A picture of an economy cooling down – not breaking.
It’s giving investors breathing room to adjust, reposition, and prepare for a potential upswing later in the year.
AI Spending: Still Towering, Just Tapping the Brakes
As a global macro investor, one of the clearest capital flows I’m tracking is AI infrastructure.
In 2024, Big Tech poured $220 billion into AI and data centers. This year? That number jumps to $300 billion.
That’s a 36% surge in one year. But the pace is softening. The major players – Amazon, Microsoft, Google, Meta – are entering a “digestion phase.”
They’ve built the infrastructure. Now they need to monetize it.
This shift matters. It tells us that while AI remains a massive opportunity, the speculative phase is giving way to execution.
Some companies will win big, others may struggle to extract value. Investors should stay focused on cash flows, not just narratives.
Enterprise adoption is growing, but it’s still early.
Use cases like automated workflows, AI copilots, and data center efficiency gains are moving from theory into practice.
The monetization curve may steepen in 2026 – but the seeds are being planted now.
We’ll likely see bumps in earnings and price action along the way. But this pause? It’s not the end. It’s a reset.
And for those with a long-term mindset, it could be the best time to accumulate quality tech exposure at a discount.
Fixed Income: A Quiet Storm in Municipal Bonds
Here’s a risk few are talking about: Medicaid funding cuts.
If Congress lowers the federal Medicaid match from 50% to 40%, states like Missouri could face 22% budget gaps.
Even Hawaii may see a 5% hit. And since Medicaid makes up nearly 30% of state budgets, the municipal bond market could feel the squeeze.
Local governments and hospitals may see their reimbursements slashed.
That puts pressure on credit quality, especially in economically weaker states. This isn’t just theory – it’s already being priced into some muni spreads.
As someone focused on income generation, my take is clear: this is the year to diversify your yield sources.
Don’t depend on one layer of government to keep promises. Look for stronger, shorter-duration assets with better fundamentals.
And beyond munis? The entire bond universe is entering a more complex phase. Rate volatility is back.
Inflation expectations are anchored but fragile. Investors need to think tactically: blend public and private credit, shorten duration, and stay nimble.
Oil in 2025: Caution Over Capacity
Forget the old “drill, baby, drill” mentality. In 2025, U.S. oil producers are focusing on profit over production.
According to the Dallas Fed, it now costs $65 per barrel to profitably drill a new well. That’s up slightly from $64 last year.
With WTI trading around $66-$70, there’s little incentive to ramp up aggressively.
But existing wells are still cash cows at $41 breakeven, so output is stable. Add in steel tariffs and global uncertainty, and you get a sector leaning into caution.
Many CEOs are choosing to return capital to shareholders through dividends and buybacks rather than chase higher output.
This is a theme across the energy complex: capital discipline over expansion. For investors, that spells improved return on equity and potentially higher valuations.
Oil prices are likely to grind higher into summer – $75-$80 is the new consensus. And if geopolitical risks flare up? There’s upside optionality.
The best plays remain high-quality producers with low leverage, solid hedging strategies, and a focus on shareholder yield.
The old days of over-leveraged growth are gone. This is a new era for energy investing.
International Macro Equities: Hidden Gems, Huge Discounts
As a global macro investor, I can’t ignore this: U.S. equities are expensive.
At the end of 2024, the MSCI USA Index traded at 21.9x forward earnings. The MSCI ACWI ex-USA? Just 13.2x.
That’s a 66% premium – the widest in over two decades.
Meanwhile, international names are catching up. Europe just had its best January versus U.S. markets in ten years.
After months of outflows, inflows are finally back. Japan is seeing renewed interest.
Emerging markets like Brazil and India are attracting attention thanks to demographics and fiscal reforms.
The “Magnificent Seven” in the U.S. are worth $17.6 trillion, more than the entire European stock market.
And yet, world-class firms like Novo Nordisk, TSMC, or Schneider Electric are trading at 30-40% discounts – despite strong U.S. revenue exposure.
Some of these companies actually have higher margins and stronger balance sheets than their U.S. peers. Investors simply haven’t looked their way – until now.
Want U.S. quality at global prices? This is your moment.
Private Debt: The Quiet Income Revolution
Let’s talk about income. Bonds are shaky, yields are inconsistent – and yet, private credit is thriving.
Direct lending, a major slice of the private debt market, returned 8–10% annually over the last 20 years, with loss rates under 1.1%.
That’s hard to beat. These aren’t traded instruments – they’re custom loans with strong protections.
In 2024, private debt funds raised $250 billion globally, and the 2025 pipeline looks even stronger. Institutional allocators are increasing exposure, not trimming it.
What makes private credit stand out is its ability to adapt. Interest payments are often floating, offering a hedge against rising rates.
And with more demand from middle-market borrowers, origination terms are investor-friendly.
If you’re a qualified investor looking for stable income, here’s my take: this is the most attractive corner of the debt market right now.
But access and diligence are key – partner with managers who have strong track records and robust sourcing capabilities.
My 2025 Gameplan
Now let me tie it all together for you.
I’m leaning into mid-cap U.S. equities – they’re less crowded, less global, and priced better than mega caps.
These companies are also more exposed to domestic growth trends, which remain healthy.
Large caps? Solid, but already played their cards. I’m being more selective here, focusing on companies with clear earnings visibility and strong capital allocation.
Commodities? Yes, especially with global supply tightening and summer demand in sight. Energy, agriculture, and industrial metals all deserve a closer look.
Private credit? A clear win if you can access it. Real yield, low volatility, and inflation protection make it a foundational pillar.
I’m steering clear of long-duration bonds (too much rate risk) and treading lightly in emerging markets – still too many political landmines for now.
But I’m keeping an eye on India, Mexico, and Vietnam for potential entry points.
In short, 2025 is a year to be tactical but not timid.
2025 Could Be the Year You Look Back On
We’ve exited the era of zero rates, infinite liquidity, and endless tech momentum. What’s next will be harder, but far more rewarding for those who adapt.
This is the year to go global, rethink yield, and challenge the consensus. The biggest risk? Sticking to what worked last cycle.
As a macro investor, I’m telling you: the world is shifting beneath our feet – but if you know where to look, the path ahead is full of opportunity.
Get curious. Get selective. And above all, get ready.
Let’s step into it. Eyes wide open.