Quarterly Economic Analysis - Q4 2024
Thank you for joining us for our Q4 2024 Economic Analysis at Portafolio Capital.
U.S. markets closed 2024 up approximately 23%, defying volatility in the final quarter. December brought uncertainty, with a newly elected president set to take office and ongoing concerns over whether the Federal Reserve had inflation under control. Yet, the year ended stronger than expected, largely due to a narrative of regulatory rollbacks across sectors and an “America First” foreign policy taking shape in Washington.
Market Uncertainty & Policy Impact
Today, markets are searching for stability in an environment defined by policy execution under the new Trump administration. With rising tariffs, a U.S.-centric foreign policy, and fiscal accountability under discussion, market reactions in recent weeks have been expected. History shows that markets dislike uncertainty, yet for long-term investors, volatility can create opportunity.
At Portafolio Capital, we emphasize that capital markets exist to generate long-term value. Maintaining a well-diversified portfolio is key to weathering short-term swings and capturing mispricing across asset classes. The real question is not whether volatility exists—but where investors see long-term value amid market dislocations.
Technological Shifts & Employment Outlook
As discussed in previous panels, AI and quantum computing are accelerating structural changes across all 11 sectors of the economy. A simple search reveals how AI has reshaped industries, fueling efficiency but also workforce displacement. With layoffs extending into federally backed programs, labor market strain is inevitable. Our expectation is that if unemployment surpasses 4.3%, the Fed may be forced into a more dovish stance.
Why We Remain Bullish on U.S. Markets
Despite global uncertainties, we remain bullish on U.S. equities due to several structural advantages:
Fastest Startup-to-Public Pipeline – The U.S. remains the best place for companies to scale from early-stage to IPO.
Entrepreneurial Ecosystem – A business-friendly environment continues to fuel productivity and GDP growth.
Robust Growth Sectors & Strong Consumer Base – Key industries remain resilient, supporting long-term earnings.
The coming FOMC meetings will be critical in setting market direction. While forecasting short-term moves is challenging, our conviction remains: for long-term capital appreciation, U.S. markets continue to provide the best opportunities—especially for those who diversify across sectors and invest in well-capitalized companies.
Final Thoughts
Reflecting on past market cycles, financial insights were more easily digested between 2010 and 2016. Today, filtering noise and identifying true market catalysts requires a deeper focus. The Fed itself appears uncertain about its next moves, and while the new administration’s policies show promise, much remains unclear.
I look forward to continuing this discussion as we close the upcoming quarter and will provide an update after the 31st.
For those joining us for the first time—welcome. It’s great to have you here.
Mauricio Sanchez
Portfolio Manager & CIO
www.portafoliocapital.com/subscribe
Portafolio Capital Management is an independent wealth and capital management firm based in San Antonio, Texas. With over 12 years of combined investment and macro-economic analysis experience, our goal is to instill confidence in our investors through how we view markets and our investment approach. As a Registered Investment Advisor (RIA) and fiduciary, we are held to the highest standard when it comes to managing your money and are bound by law to act solely in your best interest.
—
At Portafolio Capital Management, we believe that understanding your unique risk tolerance is key to successful investing. Our comprehensive risk analysis tool is designed to assess your financial personality, time horizon, and comfort with risk, empowering you to make decisions that align with your long-term goals.
https://www.portafoliocapital.com/risk-analysis
—
The content provided is for informational purposes only and should not be considered financial, legal, or tax advice. Individuals should consult their financial advisor, tax professional, or legal counsel before making any investment or financial decisions.
Portafolio Capital Management LLC does not recommend the buying or selling of securities through any published content. We strive to provide accurate information sourced from reliable resources such as FRED, Yahoo Finance, CNBC, and company-specific investor websites. However, we cannot guarantee its accuracy and encourage readers to conduct their own due diligence. We disclaim liability for any inaccuracies and are under no obligation to update or revise the information provided.
Portafolio Capital Management LLC, a Registered Investment Adviser based in Texas, complies with all notice filing requirements in states where we conduct business. This communication does not constitute an offer to sell or an invitation to purchase any investments.
For full disclosures, visit www.portafoliocapital.com/disclosures-and-documents.
