The global economy may be edging back to stability, but the investment road ahead remains riddled with potholes, according to Canaccord Genuity’s Chief Investment Strategist, Tony Brennan. Delivering the keynote address at the RIU Explorers Conference in Fremantle, Brennan dissected the forces shaping capital markets, commodity prices, and investor sentiment in 2025.
Tony Brennan presenting at RIU Explorers Conference
Inflation eases, but new risks emerge
While inflation is trending towards central bank targets and interest rates are starting to ease, Brennan warned that the next round of challenges is already forming on the horizon.
“Inflation is moderating, interest rates are beginning to ease, and economic growth has been relatively steady,” Brennan told the packed audience of investors and resource executives. “However, we’re now facing a fresh set of challenges, including shifting US policies, uncertainty around global monetary direction, and the risk of stretched equity valuations.”
He pointed to policy shifts in the US, particularly post-election, which could stoke inflationary pressures again. Despite market optimism following the election, uncertainty remains high—especially in Europe and emerging markets, where economic fragility persists.
The US stock market: a double-edged sword
The dominance of the US stock market has been a defining trend of the past decade. Brennan highlighted that the US now accounts for two-thirds of the global equity market, with the top ten S&P 500 stocks comprising over a third of the index.
While this has been a boon for investors who have ridden the tech-driven bull market, Brennan cautioned that such concentration raises significant risks.
“The US stock market has been the clear outperformer over the last decade, but current valuations—particularly for mega-cap stocks—suggest that investors should be cautious,” he said.
Commodity markets: steady but watch for shocks
For resource investors, commodity markets remain a mixed bag. Prices have largely moved sideways, reflecting a delicate balance of supply and demand. Brennan noted that while global economic growth is holding firm—thanks in large part to resilience in services offsetting weaker manufacturing activity—any major policy shift or geopolitical event could tip the scales.
Capital flowing to select sectors
Brennan urged investors to stay focused on where capital is moving. With mining exploration and development projects still needing strong financing support, understanding macroeconomic trends is critical.
“For resource investors, the focus should be on where capital is flowing and how macroeconomic trends impact commodities and exploration financing,” he advised.
The road ahead: volatility and opportunity
Brennan’s message to the 2,000-plus delegates at the RIU Explorers Conference was clear: while optimism has returned to some corners of the market, volatility is far from over.
The conference continues over the next two days, with ASX-listed resource companies taking the stage to showcase their exploration and development strategies. For investors, the challenge remains navigating a world where inflation, policy shifts, and shifting capital flows dictate market movements.
One thing is certain—2025 won’t be dull.
