Dear friends of Arcus Capital Partners,
We hope this letter finds you well and that you had a wonderful end to 2024. The fourth quarter was packed full of market-moving events and saw the conclusion of the much anticipated presidential election, with Donald Trump winning by a decisive margin of 312-226 electoral college votes (Chart 1). The Federal Reserve (Fed) continued its cutting cycle by lowering short-term interest rates in November and December. Heightened animal spirits and the anticipation of a business-friendly administration sent domestic equities to new all-time highs. At the same time, their international counterparts lagged due to the strong US dollar and fear of fresh tariffs. Interest rates across all tenors began pricing a Trump victory early in the quarter and continued higher into year-end. Commodities remained volatile and varied under the surface, while the US dollar made new highs on the year. We hold a cautiously optimistic view of equities and expect increased volatility this year. We still prefer private credit to public markets within fixed income, but we think some high-quality parts of the market (e.g. US Treasuries) are attractive. Finally, we encourage investors to keep a long-term perspective and stand ready to add to positions during times of weakness.