As we look into the new year and what to expect from Markets, we are thrilled to be hosting Torsten Sløk – Partner & Chief Economist at Apollo Global Management.
Opening Remarks
Eric:
Hello, everyone, and thank you for joining us for our first market and economic update of 2025.
On behalf of the entire Carpion Private Wealth team, we hope everyone had a wonderful end to 2024 and that we’re all looking forward to another great year — both in the markets and in our personal lives.
At Carpion, whether it’s in the office, over Zoom, or at a large in-person event, we always try to provide educational forums where we can bring relevant subject matter to our clients and participants — from markets and healthcare to Social Security and legislative updates.
Our goal today is simple: to provide clarity and perspective as we step into the new year.
This is a time to reflect on what we’ve learned and prepare for what’s next, and there’s no better way to do that than by hearing from some of the brightest minds in our industry.
We’re very grateful to have a special guest with us today who brings an invaluable amount of experience and insight regarding markets and the economy as we kick off the year.
Torsten Sløk is a partner and Chief Economist at Apollo Global Management.
Prior to joining Apollo in 2020, Torsten spent 15 years on the sell side, where his team was consistently top-ranked by Institutional Investor in fixed income and equities.
Previously, he worked at the OECD in Paris in both the Money and Finance Division and the Structural Policy Analysis Division.
Torsten, thank you so much for being here.
Torsten Sløk:
Hi Eric, thank you so much for having me. Happy New Year.
Eric:
Happy New Year. We know our audience and our team are looking forward to hearing your thoughts on what’s ahead.
Market & Economic Outlook for 2025
Torsten Sløk:
As we begin 2025, the key question for investors is whether the economy can continue slowing gradually without falling into recession.
The U.S. economy has remained remarkably resilient. Consumers continue to spend, labor markets remain healthy, and corporate balance sheets are generally in good shape.
At the same time, inflation has come down meaningfully from the highs we experienced over the past several years.
That combination has allowed markets to remain optimistic about the outlook for both equities and fixed income.
One of the biggest themes we’re watching is the Federal Reserve and the path of interest rates.
The market is now focused less on whether inflation is falling and more on how quickly growth may cool and how aggressive the Fed may need to be with future rate cuts.
If inflation continues moderating while the labor market softens gradually, that creates the potential for what many would describe as a “soft landing.”
However, if growth slows too quickly, markets may begin pricing in recession risks more aggressively.
At the moment, our base case is that the economy continues to slow in an orderly fashion.
The Consumer & Labor Market
Torsten Sløk:
The consumer remains the backbone of the U.S. economy.
Employment growth has slowed somewhat, but unemployment remains historically low.
Wage growth has also moderated, which helps ease inflation pressures while still supporting consumer spending.
What’s interesting is that consumers are becoming more selective.
They’re still spending money, but they’re becoming more price-sensitive and more focused on value.
That’s why companies with strong pricing power and strong balance sheets continue to outperform.
Interest Rates & Federal Reserve Policy
Eric:
What are your thoughts on interest rates as we move through 2025?
Torsten Sløk:
We think rates are likely to trend lower over time, but the process probably won’t be perfectly smooth.
The Fed wants to avoid cutting too aggressively too quickly because inflation risks still exist.
At the same time, they also don’t want policy to remain too restrictive if the labor market begins weakening more materially.
So the Fed is trying to balance both risks simultaneously.
The bond market has already started adjusting to that reality.
If inflation continues moderating and growth slows gradually, fixed income could continue to offer attractive opportunities for investors.
That’s especially true after several years where bonds struggled due to rapidly rising rates.
Artificial Intelligence & Technology
Eric:
Technology and AI have obviously been major themes in the market. How are you thinking about that sector today?
Torsten Sløk:
Artificial intelligence continues to be one of the most important long-term themes driving markets.
We’re still in the early stages of understanding how transformative AI may ultimately become across industries.
The companies leading the AI buildout continue to benefit from enormous capital investment and strong demand.
That said, investors also need to remember that periods of innovation often come with volatility.
Markets can become overly enthusiastic in the short term, even when the long-term story remains intact.
So while AI remains an incredibly important theme, diversification and discipline still matter.
Market Volatility & Portfolio Construction
Torsten Sløk:
One thing investors should always remember is that volatility is normal.
Corrections are a natural part of market cycles.
The key is maintaining discipline and focusing on long-term objectives rather than reacting emotionally to short-term moves.
Asset allocation remains critically important.
Having the right balance between:
- Equities
- Fixed income
- Cash
- Alternative investments
…can help investors stay invested during periods of uncertainty.
The investors who tend to struggle the most are often those who become too concentrated or overly reactive during periods of market stress.
International Markets
Eric:
Are there any international opportunities that stand out to you?
Torsten Sløk:
International markets remain mixed.
Certain areas continue benefiting from manufacturing shifts and global supply chain realignment.
However, the U.S. still maintains significant advantages because of:
- Innovation
- Technology leadership
- Consumer strength
- Capital markets depth
That’s one reason U.S. equities have continued outperforming many international markets over the past several years.
Closing Thoughts
Eric:
Any final thoughts for investors as we begin 2025?
Torsten Sløk:
The most important thing is to remain patient and disciplined.
Markets will always experience periods of uncertainty and volatility.
But long-term investing success typically comes from staying focused on fundamentals, maintaining diversification, and avoiding emotional decision-making.
Eric:
Torsten, thank you again for joining us today and for sharing your perspective.
We truly appreciate your insights and your time.
As always, our goal is to continue providing educational updates and timely commentary for our clients and audience throughout the year.
Thank you everyone for joining us, and we look forward to speaking with you again soon.
Have a wonderful evening.