LIVE MARKETS-A tale of two halves

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

A TALE OF TWO HALVES

With the first half of 2025 over, Ameriprise chief market strategist, Anthony Saglimbene, reviewed equities' performance and looked ahead to the rest of the year.

The strategist described the start of 2025 as a "tale of two halves" with more defensive sectors doing well in Q1 before being upstaged in Q2.

"During the first three months of the year and into April, there was a lot more caution in the market. Sectors like consumer staples, healthcare and defensive sectors like utilities did a little bit better because investors were looking for some safety."

But then "once we got past the fears of the Liberation Day tariffs and the opportunities that were created in some of the more cyclical sectors, those sectors lead in the second quarter," he said.

"Once April 9th rolled around and we'd washed out some of the worst fears about tariffs and the White House came out with the tariff reprieve," Saglimbene noted that investors spent most of Q2 buying "growth leaders of the economy."

In Q2 investors bought technology and communication services and they continued to push industrials up because of defense spending and the idea that, despite earlier fears, "maybe we're not going to go into a recession."

Looking forward, the strategist is hoping for a second half with less volatility. However, he notes that investors look pretty complacent right now as "they've priced in a very benign trade environment" and a "pretty benign view of inflation" as it relates to trade policy. And they've also priced for growth to remain positive and "for some of the AI momentum to continue."

"So, whether you're information technology, consumer discretionary, industrials or healthcare, it's really going to be about the profitability that these companies can generate in the second-half of the year. Valuations are kind of high so we need to see companies across the S&P 500 sectors deliver on earnings expectations," Saglimbene said.

And of course, with July 9th marking the end of the 90-day tariff reprieve for some of the biggest US trading partners, investors will be hoping for extensions or some trade deals.

Ameriprise is currently overweight information technology and financials and underweight healthcare and consumer staples. But he points to a few things that could temper expectations for the second half of the year.

"For some of the more cyclical areas that are not technology, it might be a little bit harder with some trade headwinds, particularly if we're going to have 10% universal tariff rates stay, or maybe we see a little bit more trade aggression with China," he said.

(Sinéad Carew)

*****

EARLIER ON LIVE MARKETS:

GOLD MAY BE LOSING ITS LUSTER CLICK HERE

PLAYING IT COOL: JOLTS, PMI, CONSTRUCTION SPENDING CLICK HERE

THE DICHOTOMY OF WALL STREET AND THE DOLLAR CLICK HERE

U.S. STOCKS MIXED; NASDAQ'S 6-DAY WIN STREAK AT RISK CLICK HERE

THE DRONE AGE DAWNS WITH THE PENTAGON'S RISING INVESTMENT CLICK HERE

TARIFFS, TENSION, AND TACTICAL TWEAKS: RBC REVISES US SECTOR SCRIPT CLICK HERE

JOBS DATA LIKELY HOLDS THE KEY TO FED'S JULY RATE CUT DOOR CLICK HERE
AT THE HALFWAY MARK, MOMENTUM IS THE FRONTRUNNER CLICK HERE

WHAT GOLDMAN THINKS HAPPENS IF THE FED EASES MORE QUICKLY CLICK HERE

MAKING WALL STREET GREAT AGAIN CLICK HERE

GOOD YEAR FOR EUROPEAN STOCKS, BUT NOT FOR FUND MANAGERS CLICK HERE

SLEEPY EUROPE CLICK HERE

EUROPE BEFORE THE BELL: NO RECORDS HERE CLICK HERE

MORNING BID: UNCERTAINTY DOMINATES ECB FORUM CLICK HERE