Investment Strategist Anastasia Amoroso on Interest Rates, Tariffs, and IPOs

Interest Rate Outlook

• 💡 Anastasia Amoroso agrees with Treasury Secretary Scott Bessent on the scope for an easing cycle, suggesting a terminal rate of around 3.5% could be appropriate in the coming months.
• ⚠️ Despite a higher-than-anticipated PPI number, Amoroso believes it won't significantly alter the rate cut calculus, as companies are seeing rising input prices but not yet fully passing them to consumers.
• 📈 Manufacturers may see squeezed margins, leading to some price increases, but a direct 100% pass-through from PPI to CPI is unlikely, as has been observed many times before.

Tariff Exposure and Market Confidence

• 🎯 Partners Group assesses that approximately 86% of their companies have minimal or no tariff exposure, due to factors like domestic orientation or product shifting.
• 🚀 Amoroso maintains a constructive market view, believing companies will absorb tariff impacts this quarter as a one-off hit.
• 📊 Clarity on tariffs, the rate environment, and the economy is contributing to increased confidence among CEOs.

Capital Markets and IPOs

• 📈 A pickup in IPO and M&A activity is seen as very constructive for capital markets and beneficial for private equity businesses.
• 💰 Global IPO volumes are up about 21% year-over-year, and M&A volumes have increased by approximately 30%.
• 🌟 IPOs, particularly those from companies with market caps above $1 billion, have shown strong performance, with average gains of 50-60% since their debut.
• 🚀 The trend of increasing IPOs is expected to continue through the fall, supported by clarity on tariffs, rates, and economic resilience.