“It’s not whether you get knocked down, it’s whether you get up.”
–Vince Lombardi, NFL Hall of Fame Coach
Volume 30
Through the Dip: What the First Half Taught Us About the Road Ahead
What Happened in the Markets
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We’ve all experienced a long road trip. Picture yourself halfway through a cross-country drive. The car’s performing well, the playlist is great, snacks are enough, and your co-pilot (bless their heart) hasn’t asked, “Are we there yet?” in hours. But then, in Kansas, the flow breaks. Construction zones, detours, and that odd clanking noise that turns out to be nothing—luckily. You momentarily doubt the trip, but deep inside, you recognize it’s part of the journey. That sums up the first half of 2025.
Markets entered January with momentum. After a powerful 2023 and 2024, this bull market charged into its third year—historically a bumpier phase for equities (as we’ve outlined in past memos). And sure enough, we saw it. From February through early April, equity markets flirted with bear territory, buffeted by a poorly communicated tariff announcement and a flare-up in geopolitical tensions. But by mid-year, the clouds began to part, and investors were reminded that detours don’t mean dead ends.
What looked like a shaky start turned into one of the sharpest first-half reversals in recent memory. Our research notes that when both May and June finish green (as they did), the second half tends to follow suit with strength.
Looking forward, we remain constructive but measured. The case for equities is supported by:
We’re also seeing confirmation in the data: job growth remains positive, inflation appears to be moderating, and earnings revisions have begun to trend upward again—a subtle but essential sign that corporate America may be finding its footing.
At the same time, we’ve not ignored the risks:
Our positioning remains balanced. We continue to diversify our diversifiers—with exposure to commodities—such as gold, international equities, and alternatives. The core equity sleeve retains its barbell structure, pairing momentum with lower-volatility names to navigate turbulence while maintaining upside potential.
Notably, we increased our international exposure in February, trimming what had been a long-standing overweight position in US equities. That move has paid off meaningfully, with international markets—especially developed ex-US—delivering standout performance thanks in part to currency tailwinds and economic momentum abroad. We believe this positioning remains favorable and should continue to offer diversification benefits and potential alpha through the back half of the year.
We’re not chasing returns, but we are staying invested. We are tilting selectively—adding where valuations and fundamentals align, reducing where the run-up has outpaced the story. That balance—between conviction and caution—remains our compass.
Like that road trip detour, the turbulence in early 2025 made some question the route. But here we are—past the construction zone, playlist still strong, and markets cruising again. The lesson? Temporary frustration doesn’t invalidate the journey. It just reminds us that the destination is long-term growth, not short-term perfection.
We’ve made adjustments along the way—most notably our shift toward international markets earlier this year—and those moves are positioning us well as conditions evolve. While volatility may return, we’re better equipped, more diversified, and strategically positioned for a broader set of outcomes. As we turn toward the second half, we do so with optimism— eyes on the road, one hand on the wheel, and the playlist back in rhythm.
June capped off a strong second quarter, with US large-cap equities rising over 5% and extending May’s impressive gains. Mid- and small-caps followed suit, signaling broader participation and improving sentiment. Softer inflation data, steady labor markets, and easing trade tensions helped drive the rally.
International stocks continued to outperform, aided by a weakening dollar and solid economic data abroad. Developed markets (MSCI EAFE) gained 2.5%, while emerging markets added 6.6%, supported
further by favorable currency effects for US investors.
In fixed income, decreasing yields modestly pushed on core bonds. The Bloomberg US Aggregate Bond Index rose 1.5% for the month, driven by a slight downward drift in Treasury yields as investors priced in slower— but still possible—rate cuts later this year. Credit sensitive sectors held up better: high-yield bonds rose 1.9%, and bank loans returned 0.9%, benefiting from strong demand for income and a relatively healthy corporate backdrop.
In short: June delivered follow-through on May’s strength, with equities leading and fixed income adjusting in stride.
As the Chief Investment Officer, Stephen Swensen oversees investment management, research, portfolio design, and all investment-related operations at Atlas. He also chairs the Atlas Investment Committee, guiding strategic investment decisions.
Stephen’s career began as a Financial Analyst for Deseret Mutual Benefits Administration (DMBA), a role in which he managed investments for a private pension fund and insurance company. Subsequently, he served as an investment analyst and portfolio manager for local Registered Investment Advisors (RIAs). Before joining Atlas, Stephen contributed his expertise as an Outsourced Chief Investment Officer (OCIO) for the Carson Group, supporting advisors on the West Coast. Educationally, Stephen holds an MBA and an MS in Investment Management and Financial Analysis from Creighton University. He has earned the Series 65 Uniform Investment Advisor License and is actively pursuing the prestigious
Chartered Financial Analyst (CFA) designation.
Beyond his professional achievements, Stephen is an enthusiastic hockey fan, both on and off the ice. He finds joy in playing the piano, golfing, reading, and outdoor cooking. However, his greatest source of happiness comes from spending quality time with his wife and four children
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