The Week Ahead: 24th-28th March 2025

It was another dramatic week in global politics but the FTSE ended up right around where it started (in the 8600s), as did the S&P500.

A major headline during the week came on Tuesday when a survey of fund managers revealed the greatest rotation out of US stocks since records began in 1999. Perhaps UK equities will benefit from this shift in sentiment:

Source: trustnet, BofA Global Fund Manager Survey

You can see from the above chart that while fund managers are now underweight US equities, there have been times in the past when they have been more underweight.

What’s exceptional about recent events is the sharpness of the change.

And although we are speaking in hindsight, it isn’t easy to come up with reasons for the sudden shift. The theme of overvalued US mega-caps is one that we’ve touched on before in this report. 

The “Magnificent 7” have struggled in 2025 as investors have finally started to worry about valuations and the AI boom:

• Apple (NSQ:AAPL) down 14%

• NVIDIA (NSQ:NVDA) down 12%

• Microsoft (NSQ:MSFT) down 9%

• Amazon.com (NSQ:AMZN) down 11%

• Alphabet (NSQ:GOOGL) down 14%

• Meta Platforms (NSQ:META) up 1%

• Tesla (NSQ:TSLA) down 39%

On top of that, we have a fractious political environment with ongoing concerns around tariffs and trade wars in addition to pre-existing geopolitical concerns (in particular Russia and Ukraine). 

The only thing that’s not causing any major problems at this time is the economy. US initial jobless claims on Thursday showed only a very slight increase in the number of individuals filing for unemployment insurance.

On Wednesday, the Federal Reserve left its target interest rate unchanged 4.25%-4.5%. It is unchanged since December but two further rate cuts are still expected during 2025:

Source: Trading Economics

The Fed has a dual mandate that includes both maximum employment and stable prices (meaning inflation of 2%).

They are winning in terms of full employment, but have not quite managed to hit their 2% inflation target. However, they aren’t too far off that target either. The CPI release two weeks ago showed prices rising annually at a pace of 2.8%, better than the 2.9% that was expected and the 3% recorded in the prior month.

With US numbers looking like this, it’s understandable that the Fed is in no hurry to change rates. Let’s hope that tariffs don’t put a wrench in this very pleasant economic picture!

Looking forward to the week ahead, we will have UK CPI on Wednesday, which is expected to fall slightly to 2.9% (previously 3%).

The Fed’s preferred inflation measure for the United States, the PCE, will be out on Friday. It was last seen growing at 2.5% year-on-year and my understanding is that this is expected to increase to 2.7%. So the Fed does still have some work to do when it comes to inflation.

In domestic company news, we are expecting another large set of final results statements. I’m particularly looking forward to results from Next (LON:NXT), in which I have a long position. But we will be spoilt for choice with other stocks regularly covered including the likes of Kingfisher (LON:KGF) A G Barr (LON:BAG) and Franchise Brands (LON:FRAN),

Economic Calendar

Companies Reporting