Navigating Uncertainty, Seizing Structural Opportunities

As we reach the halfway mark of 2025, global markets remain full of unknowns. Shifting U.S. policy directions and the ever-changing geopolitical landscape are reshaping the macroeconomic picture. Once-reliable long-term indicators have proven less effective this year, presenting both challenges and opportunities for investors.

However, unlike previous years, three major events in the first half of 2025 have added new layers of complexity for the months ahead:

1. Tariff Shock and the Repricing of Global Trade

Earlier this year, the U.S. imposed new tariffs on the EU and several Asian economies, triggering a reassessment of global supply chains.

Short-term impact: Higher manufacturing costs, squeezed export profits, and lowered earnings forecasts for multinational corporations.

Structural impact: Trade relationships are being reshaped. Smaller economies risk losing supply chain share, leading to greater market volatility.

For investors, this suggests pressure on valuations for traditional export-led companies, while domestic substitution and regional self-sufficiency industries are likely to gain both policy and capital support.

2. Inflation Surge and Liquidity Tightening

Rising energy prices, combined with the pass-through effects of tariffs, have driven core inflation higher than expected in many regions.

Short-term impact: Central banks face a dilemma between cutting rates and fighting inflation, leading to more cautious monetary policy.

Structural impact: High-leverage industries will face persistently elevated financing costs, and market tolerance for high-growth, high-valuation assets will shrink.

Investors should strengthen portfolio resilience and watch for tactical opportunities in inflation-benefiting assets such as energy, agriculture, and certain resource stocks.

3. Interest Rate Cuts: Not a Risk-Free Boost

With economic growth slowing, markets widely expect major central banks to begin rate cuts in the second half of 2025.

Short-term impact: Early rate cuts may coincide with a release of economic downside pressures, including delayed effects such as weaker corporate earnings and higher unemployment.

Structural impact: While rate cuts can improve risk appetite, if fundamentals lag, markets could see a “liquidity-rich but growth-poor” environment.

The key is to focus on assets where liquidity improvements align with solid fundamentals—rather than chasing rate-cut headlines blindly.

Strategies for the Second Half of 2025

In this environment, the real skill lies in identifying the structural patterns behind uncertainty:

• Faster policy shifts → Shorter market reaction cycles → Strategies must adapt quickly.

• Multiple macro paths → Several possible outcomes → Single-point forecasts can no longer cover all risks.

• Economic fundamentals remain valid → Policy may redirect capital flows in the short term but cannot reshape the global economy overnight.

This means investors should replace single-scenario predictions with scenario-based positioning and structural trend tracking:

• Seek assets where short-term fluctuations match long-term logic.

• Prioritize companies and sectors that remain resilient across multiple scenarios.

• Use layered allocations and intelligent monitoring tools to control downside risk in high-uncertainty conditions.

Galexor Capital’s Three Main Investment Themes for H2 2025

1. Global liquidity repricing and its impact on cross-border capital flows.

2. Technological and emerging industries gaining a competitive edge amid geopolitical fragmentation.

3. Safety and stable returns as scarce value during periods of high volatility.

In uncertain markets, information and insight are your North Star. At Galexor Capital, we track global macroeconomic and policy developments in real time, using systematic analysis and forward-looking strategies to guide investors—helping you find certainty in uncertainty and lock in value amid volatility.

As we move into the second half of 2025, let Galexor Capital be your partner in spotting trends and navigating the future.