June 2025 edition

Visual Description: The video opens with the Truist logo on a dark purple background and transitions to a man with salt and pepper hair and a black jacket speaking to the camera. 

 

Keith Lerner: Thanks so much for joining us. 

 

Visual Description: Text in a box slides in on the left of the video reads: 

Text on Screen: Keith Lerner, CMT. Co-Chief Investment Officer, Chief Market Strategist.  Truist Advisory Services, Inc.

 

Keith Lerner:  This month we've made some notable changes to our house views based on a shift in the weight of the evidence. Today I'm going to walk you through what those changes were, as well as the evidence behind those changes.

 

 

Keith Lerner: So upfront, what has changed?

 

 

Visual Description: Keith is pushed to the right of the screen while a graphic appears on the left. The graphic is three columns comparing the data between less attractive and more attractive.

 

 

Text on Screen: House Views. Key position 3 to 12 months. Asset classes is the header and equity, fixed incomes, and cash are under it. Global equities is the header and US large cap, US mid cap, US small cap, International developed markets, emerging markets (EM) and value style relative to growth are under it. Fixed income is the header and US government, US mortgage-backed securities, US investment grade corporates, US high yield corporates, Leveraged loans and Duration are under it. The columns read Less Attractive and More Attractive

 

 

Keith Lerner: Well, from an overall tactical position, we have neutralized our posture.

 

 

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Keith Lerner:What that means specifically is we have slightly upgraded equities to neutral and slightly downgraded cash also to neutral.

 

 

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Keith Lerner: What that means essentially is we think it's not time to be on offense or defense, but more aligned with longterm, allocation targets.

 

 

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Keith Lerner: So let me now walk you through our weight of the evidence framework.

 

 

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Text on Screen: Lead with evidence to form an action point of view. As markets evolve, so should your investment advice. Circle 1 is Historical Analysis, Circle 2 is Business Cycle Indicators, 3 is Fundamental analysis, Circle 4 is Market Signals, Circle 5 is Identifying Opportunities. Continue to follow the weight of the evidence and keep an open mind

 

 

Keith Lerner: And some of you may recall that back in February, we used this framework

 

 

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Keith Lerner: to downgrade equities when we were close to the highs, because we thought there was a lot of complacency in the market. Since then, there were periods where we'd become more positive,such as the market was selling off to a little bit less positive,as the market had rebounded.

 

 

Visual Description: Keith appears on the right of the screen while a graphic shrinks and stays on the left. The graphic is the same as before 

 

 

Keith Lerner:  As we take a fresh perspective at the weight of the evidence today, again,it leads us to more of a neutral posture. And this approach really keeps us honest looking at things with a fresh perspective. So let me just walk you through some of the components of this. First, we look at a historical lens

 

 

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Keith Lerner: and looking at the current market through that historical lens. When you see a sharp decline followed by a sharp rebound and you look forward six months,that has typically been a positive sign.

 

 

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Keith Lerner: Next, in our framework is looking at the economic cycle that the economic cycle a cycle helps us determine should we be on offense or defense when recession risk is high, such as there was before tariffs de-escalated. We want to be more in defense at this point, as we've seen some of that escalation in the tariff side. Our base case is that the economy should continue to muddle through.

Keith Lerner: So not really strong growth, but likely avoid recession based on the evidence that we have today. And then as we look next at the fundamentals, you know valuations have also rebounded with this market. So valuations are somewhat rich.

 

 

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Keith Lerner:  But we have seen an important inflection in earnings trends. We call it back in February when we first downgraded stocks those earning trends were starting to move down. We've actually seen them start to move up. And I'll talk more about that in a little bit. 

 

 

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Keith Lerner: And then lastly when we look at market signals we've seen really strong participation off the lows during this rebound. We've also seen really strong global participation as well.

 

 

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Keith Lerner: So we put all that together and again suggest a more neutral overall posture. Today. So let me just walk you through a couple of charts that I think are important, that will be in our Market Navigator this month as well. 

 

 

Visual Description: Keith is pushed to the right of the screen while a graphic appears on the left. The graphic is a line graph that dips in between March 2025 and April 2025 because of the tariff pause.

 

 

Text Description: Big-picture- Despite wide swings, marketing trading close to election levels

 

 

Keith Lerner: The first one is looking at, you know,where are we in the overall market. So the S&P 500, even though we've seen, is really broad swings.

 

 

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Keith Lerner: The big picture is for the last seven months we've been in a really broad trading range. And we're essentially flat since the day after the election. Part of the reason for those wide swings is we have a new administration bringing in new policies, and this is uncertainty about whether these policies 

 

 

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Keith Lerner: are good or bad from a market perspective. And during this period of transition, the market has really been overreacting both to the upside and the downside as well.

 

 

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Keith Lerner: At this point, again, we're essentially flat for the last seven months. As we again look at more of the fundamental picture

 

 

Visual Description: Keith is pushed to the right of the screen while a graphic appears on the left. The graphic is a line graph that shows growth ranging from April 2024 to April 2025

 

 

Text Description: Fundamentals - S&P 500 earnings trends stabilizing, led by tech and communications

 

 

Keith Lerner: you know, valuations are somewhat rich, but as I mentioned we are seeing some better earnings trends for the large cap market.

 

 

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Keith Lerner: Specifically, we're seeing the S&P 500 earnings start to rise on a forward basis. That's really being driven by tech and communications. What's notable is during all this uncertainty around tariffs,

 

 

Visual Description: Keith is pushed to the right of the screen while a graphic appears on the left. The graphic is a line graph that shows growth ranging from April 2024 to April 2025

 

 

Keith Lerner: the dominant theme of this bull market, which had been technology and artificial intelligence, got pushed aside during the recent earnings season. And we saw that theme has come back to the forefront as we continue to see healthy spending. And even if the economy slows down, there's still an appetite to spend on AI so companies don't get left behind.

 

 

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Keith Lerner: I will say we're not seeing that same strength in mid-caps and small caps, so that would lead us to continue to say, stick with the U.S. and stick with large cap, overweight. Speaking about global markets, there is an important chart that we added this month to our navigator.

Visual Description: Keith is pushed to the right of the screen while a graphic appears on the left. The graphic is a line graph that shows the growth of International developed markets from 2005 to 2025.

 

 

Text Description: International developed markets- breaking out after decades of consolidation

 

 

Keith Lerner: It's the market for the international developed markets. And the main index there is what's called the MSCI EAFE.

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Keith Lerner: And what's notable is that market just broke to the upside of a multi-decade trading range. And from a tactical perspective, that is a positive. So the way we think about this, we're still underweight to international markets, but on the margin relative to where we were a year ago,

Visual Description: Keith is pushed to the right of the screen while a graphic appears on the left. The graphic is a line graph that shows the growth of International developed markets from 2005 to 2025.

Keith Lerner: we would have a little bit more international in portfolios. Relative to, like I said, a year ago, we also are seeing more easy monetary policy overseas and more stimulus relative to the U.S. And it's also a hedge against the U.S. dollar.

Visual Description: Keith is still on the right side of the screen, but the line graph has changed to a list of Key Takeaways for the video.

 

 

Text Description: Key takeaways. Economy - Muddle through is our base case. Equities - neutral posture. Large caps are greaten than small caps. International developed markets showing improved price trends. Fixed income - Maintain neutral duration posture for now. Compelling opportunity in municipals

Keith Lerner: So, you know, big picture just to wrap up, is, for me,

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Keith Lerner: from an economic perspective, we're expecting more of a muddle-through approach. Doesn't mean there's not a risk out there. But I think, you know, it's a bit more even right now. 

Visual Description: Keith is pushed to the right of the screen while a list appears on the left. The list goes over the key takeaways of the video, this is the same list as before. 

Keith Lerner:  Same thing with the equity markets. We think at this point it's not time to be on offense or defense, but more neutral relative to long-term targets. Still overweight, you know, large caps relative to small caps. And of course, we'll continue to be looking for tactical opportunities.

Keith Lerner:  On the fixed income side, yields have been bouncing around. We still see some value there and we're neutral in our duration posture. This month, we do point out that we are seeing a compelling opportunity in the municipal space.

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Keith Lerner: So with that, we’ll end there. And then, just as always, you know, we'll continue to keep an open mind, follow the weight of the evidence and keep you informed as our view evolves. Thanks so much.

Visual Description: The video closes with the Truist logo on a dark purple background and transitions to a white screen with disclosures. 

 

 

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CN:2025-xxx EXP 05-2026