Bubbles, What Bubbles? – Pitcairn Dissects Markets, Economy

Charles Paikert

30 October 2025

Optimism on the long-term prospects of the public – and private – markets was the order of the day at the annual media briefing of Pitcairn on the global marketplace.

“We’re in a sweet spot,” said Nathan Sonnenberg, chief investment officer of the century-old multi-family office based in suburban Philadelphia that manages over $10 billion for wealthy clients. “Every major asset class is going up. A lot of good things are being priced into the market.”

Sonnenberg sees the trend continuing next year. He expects a significant fiscal stimulus to the economy in next year’s first quarter from “massive tax refunds” as a result of tax code restructuring. Interest rates will be lower, inflation is likely to remain under 3 per cent and corporate capital expenditure spending should also continue to be robust, Sonnenberg said.

“Benign credit conditions,” the rate-cutting direction of the Federal Reserve Board and the performance of discretionary stocks outperforming staples were more reasons for optimism, according to Christopher Verrone, portfolio manager at research firm Strategas.

Verrone also cited the outsized influence on the markets of Secretary of the Treasury Scott Bessent, a former protégé of George Soros and hedge fund manager, suggesting that “Don’t fight the Treasury” should be added to the old Wall Street adage “Don’t fight the Fed.”

Canada and Mexico “big winners”
Rick Pitcairn, the firm’s chief global strategist, said he tells clients that “we’re in a world of asset inflation” and that he expects governments to “inflate away problems” over the next five years. Internationally, Pitcairn sees Canada and Mexico as “the big winners” as the US pivots from being overly reliant on China as a trading partner. Thanks to a “nice macro set up,” he said he expects global portfolios will continue to perform well.

Sonnenberg and Verrone also touted international stocks, the former noting that they were “much less expensive” than US equities and the latter noting capital inflows to Mexico, which he described as “the most important emerging market.”

Both men took into account the resurgent strength of the Chinese economy, but investors did not have to invest in Chinese companies to benefit, Sonnenberg said. Instead, companies not based in China but which derive 40 per cent to 50 per cent of their revenue from Chinese consumers offer an appealing alternative, he maintained.

AI focus too narrow
Sonnenberg downplayed concerns that the equity markets have been too dependent on the artificial intelligence juggernaut for recent gains. “The hyper-focus on AI has been too narrow-minded,” he said, pointing out the rise in asset prices for other industries as well. “I don’t think is a bubble… the beginning of a hugely transformative industry that’s still in its early stages.”

Similarly, Pitcairn continued to have faith in private credit and the banking sector, despite the recent concerns about leveraged loan risk after First Brands off-balance sheet financing sparked a bankruptcy filing. “The markets are telling us are idiosyncratic and not endemic,” Sonnenberg said.

K-shaped concerns
No markets are without risks, of course and, in an interview with Family Wealth Report after the briefing, Sonnenberg expressed concern about the so-called “K-shaped” economy, where the top 10 per cent of consumers account for more than half of consumption.

“We’re in a new world where the stock market now leads the economy rather than the other way around,” he said, and a market decline of more than 20 per cent could result in lower spending and a damaged economy.

Overall, however, Sonnenberg described a positive environment for risk markets for multi-generational families investing for the long term. “We tell our clients that at any point in time you can expect a 5 per cent to 13 per cent correction,” he said. “But that doesn’t change the trend.”