2025Q3: Still Exceptional, But No Longer Alone
Our title above speaks to what we here at Centerline see as the broadening of global equity market strength, with the U.S. continuing to lead—but now alongside increasingly relevant international and private market opportunities. We know it has sometimes been difficult to embrace a globally diversified portfolio in the last decade when the U.S. has done so well against many other options. What we are seeing now, however, is the possible return of multiple asset classes doing well in unison. In our slides below, we walk through a market that staged an impressive recovery from early April volatility, driven more by stabilization than euphoria. With macro uncertainty still elevated, investors have been rewarded for looking through the noise—especially those aligned with structural trends in AI, industrial renaissance, and for the right investor mindset and wherewithal, compelling opportunities in private markets.
Key themes we explore in our research this quarter include:
- 55 Days from Panic to New Highs: A powerful Q2 rebound, despite limited fundamental tailwinds.
- The AI Supercycle: Still early innings, with capital expenditures and leadership rotation pointing to potential additional upside.
- Dollar Decoupling: The weakening USD, once tightly tethered to U.S. rates, now appears driven more by trade policy than monetary dynamics, fueling relative performance outside the U.S.
- Yield Curve Implications: A dovish Fed, paired with persistent fiscal pressure, suggests steeper curves ahead and renewed support for financials.
- Private Markets: As the investable universe evolves, the private middle market is becoming central to both innovation and long-term capital formation.
