Heading into Q3 2025, global growth is projected at 2.3%–3.3%. Japan and the UK are showing resilience, but overall momentum is fragile due to trade disruptions and a rising risk of U.S. recession—currently pegged at 40–45%. With volatility likely, investors should stay selective and diversified, favoring high-quality assets.
In the U.S., the S&P 500 sits at 6,092, with projections up to 7,100 by year-end, fueled by tech and industrials. However, weak consumer spending (PCE up just 0.2%) and a soft manufacturing sector (ISM at 48.5) are red flags. Recession risk remains high, making defensive sectors like utilities and stable companies more attractive.
Globally, the eurozone continues to lag (0.3% growth in Q1), while China’s 4.5% expansion is hampered by tariffs. Japan and the UK are holding up better, but broad trade uncertainty clouds the outlook. Monetary easing continues: the Fed is expected to cut rates twice in Q3, aiming for 3.5%–3.75% by year-end, while the ECB sits at 2.0%. The BOJ’s rate hike hasn’t boosted the yen much, complicating currency dynamics.
Currency shifts are expected: the dollar should gain on the euro (to 1.1400) and pound (1.3281), weaken against the yen (139.58), and fall slightly versus the franc (0.8300), which benefits from safe-haven demand.
Commodities look solid as hedges. Gold is projected to rise to $3,515/oz, silver to $39–40/oz, supported by industrial demand and central bank buying. Brent crude, at $67.50, remains subdued due to weak global energy demand.
Risks to watch: U.S.-China trade escalation, economic slowdown, inflation surprises, and sudden policy shifts. Strategy-wise, stay flexible. Keep exposure to U.S. tech, but balance with defensives. Add gold, silver, and safe-haven currencies. Bonds—especially short-term U.S. and select emerging markets—can add stability.
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