BakerAvenue Wealth Management

A key factor for those deciding whether and when to exercise your Incentive Stock Options (ISOs) is the impact and mitigation of the Alternative Minimum Tax (AMT). Our guide takes you through some of the key AMT considerations when assessing Hold versus Sell outcomes: https://bit.ly/4k5V89L

Tariff uncertainty has led to an increase in imports (e.g., buying in front of expected surcharges). Stronger imports aren’t recessionary but will mechanically reduce GDP in the short term. Sources: Strategas, Census, Macrobond, Bloomberg, BakerAvenue. As of 2/28/2025. #MacroMonday

Fundamentals remain steady despite the macro volatility. For example, credit spreads are not responding to the increased uncertainty, an encouraging sign. Source: Bloomberg, Macrobond, BakerAvenue. As of 2/27/2025. #FundamentalFriday

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Price trends remain solid (e.g., the S&P touched an all-time high this week). However, internals have room for improvement. The percentage of stocks trading above key long-term moving averages (e.g., the 200-day moving average) remains below ’24 levels. Source: Strategas, Bloomberg, BakerAvenue. As of 2/20/2025. #TechnicalThursday

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The issuance of executive orders with new tariffs has catapulted global trade concerns back to the top of investors' minds. Companies are certainly taking notice, with “tariff” mentions on earnings calls spiking to levels not seen since the 2018 trade war. While the threats and counter threats should continue over the next few months, market reactions to recent tariff headlines serve as good reminders that policy risks are more two-sided than most investors assume. Read the full BakerAvenue Prudence Indicator, "'Tariff-ic' Earnings Offsetting Macro Volatility": https://bit.ly/4gGsxF4

The first tariff salvo has left a few questions unanswered with working narratives shifting frequently. While we see policy risks as more two-sided than most, the inevitable uncertainty is calmed by an accelerating growth backdrop. Economic growth has proven resilient, and earnings growth has continued to surpass expectations. We continue to see more positives than negatives as we enter the new year. How should investors position for the shifting investment backdrop? What are the key factors to focus on as we start the year? Watch to hear Chief Investment Officer, Doug Couden, discuss our technical, fundamental, and macro disciplines that assess the risks and guide our outlook.

Last week’s employment report had both positive (e.g., lower unemployment rate, positive revisions, increased hourly earnings, etc.) and negative (e.g., lower monthly adds, declining workweek, etc.) takeaways. The mixed report is likely to keep the data-dependent Fed on hold for now. Source: BLS, Strategas, Bloomberg, BakerAvenue. As of 2/10/2025. #MacroMonday

So far, earnings have surpassed elevated expectations. However, the market has become more discerning as negative share price reactions have been greater than average. A good environment to stay active. Source: LSEG Data, Barclays, Bloomberg, BakerAvenue. As of 2/7/2025. #FundamentalFriday