From the desks of Stanley Katz & Lauren Madera
HAPPY BRITISH PUDDING DAY! WE’VE NEVER TRIED IT, BUT WE’RE EXCITED TO CELEBRATE IT.
The three major U.S. stock market indices stumbled this past week (DJIA: -1.21%, S&P 500: -1.63%, Nasdaq: -3.04%) as concerns about elevated AI valuations caught up with the market’s momentum. This marks the worst weekly performance for U.S. stock markets since early April. Against this backdrop, Capital Group’s research team identifies three compelling investment themes emerging from today’s increasingly fragmented global landscape:
- New industrial policy rewiring supply chains. The U.S. government has taken strategic equity positions in semiconductor companies and imposed restrictions on critical minerals exports to China—moves that echo Operation Warp Speed’s approach to COVID vaccine development but applied to manufacturing resilience. Companies positioned to benefit from this reshoring trend could see sustained tailwinds.
- U.S. playing catch-up on automation. Capital Group observes that American robot adoption has lagged peers like Singapore, China, and even Germany. This may create room for companies that can help bridge the U.S. productivity gap.
- Multinational companies with decisive management. Firms with leaders who can adapt to this fragmented world—whether through reshoring manufacturing or strategically positioning operations across different geopolitical zones—may be better equipped to maintain access to all major markets and convert geopolitical complexity into competitive advantage.
The major takeaway for investors is that, while market volatility may persist as we navigate geopolitical tensions and trade barriers, companies that can successfully operate across these fault lines may offer the compelling risk-reward profiles in the months ahead.
J.P. Morgan’s Q4 2025 Factor Views presents a nuanced look at what’s working beneath the market’s surface. Their analysis shows that macro factors performed relatively well in Q3, with with macro momentum (the trend-following performance of currencies, interest rates, and commodities) and carry factors (which profit from investing in higher-yielding assets while borrowing at lower rates) both delivering strong gains. Equity factors, however, painted a more mixed picture: equity value factors (stocks that appear undervalued based on price-to-earnings or similar metrics) posted disappointing performance while equity momentum (stocks that have been outperforming continuing to rise) held up relatively better. International developed markets equity factors showed signs of strain as the dollar strengthened. However, equity quality factor performance continued to diverge by region, with some markets rewarding stability more than others. The bottom line is that headline index moves grab attention, but understanding which factors are driving returns—and which are struggling—can help investors position portfolios more thoughtfully for what comes next.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Capital Group:
J.P. Morgan Asset Management:
Franklin Templeton:
BlackRock:
Argus:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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