Hugo Angelo Lucien Manenti @hugomanenti95: "𝗠𝗼𝗻𝘁𝗵𝗹𝘆 𝗨𝗽𝗱𝗮𝘁𝗲 — 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟱 Dear..."

Portugal

𝗠𝗼𝗻𝘁𝗵𝗹𝘆 𝗨𝗽𝗱𝗮𝘁𝗲 — 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟱 Dear all, December closed the year in a relatively calm fashion, with few surprises but little additional clarity. Incoming data pointed to a cooling labour market and subdued inflation, while policy remained supportive. Markets held up well, though leadership stayed narrow. Overall, the end of the year reinforced many of the themes we have discussed over recent months: a multi-speed economy, softening employment, resilient capital investment, and a policy backdrop that remains accommodative. 𝗜. 𝗠𝗮𝗰𝗿𝗼 & 𝗣𝗼𝗹𝗶𝗰𝘆 𝗧𝗵𝗲𝗺𝗲𝘀 🔹 Labour market cooling November and December job reports confirmed a gradual slowdown in employment. Job creation remained positive but subdued, while revisions continued to trend lower. Unemployment is still creeping higher, despite lower labour force participation and reduced immigration flows. Younger and lower-income workers remains under pressure. 🔹 Inflation readings: softer, but noisy Inflation data surprised to the downside late in the month, with core CPI printing lower than expected. While markets welcomed the news, the signal is difficult to interpret given the government shutdown–related data gaps and ongoing tariff effects. Inflation appears contained for now, but confidence in the precision of the data is limited. 🔹 Fed rate cut, cautious messaging The Fed delivered another 25bps rate cut in December, as expected. The accompanying communication remained cautious, emphasising data dependency and persistent inflation risks. The message was consistent with recent months: policy is easing, but without a strong commitment to a sustained cutting cycle. 🔹 Financial conditions remain supportive Despite mixed macro signals, financial conditions stayed relatively loose. Equity markets held firm, credit spreads remained contained, and liquidity continued to support risk assets into year-end. The impulse is however weakening, and I expect conditions to be more mixed next year. Summary: The macro backdrop remains broadly supportive for markets, but visibility is limited. Labour market softness is becoming clearer, inflation data is mixed, and policy flexibility may be more constrained than markets assume. 𝗜𝗜. 𝗠𝗮𝗿𝗸𝗲𝘁 & 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗡𝗲𝘄𝘀 Market leadership remained concentrated in large-cap growth, while many smaller and value-oriented names continued to lag. In that context, portfolio developments this month were largely company-specific and constructive. 🔹 Xponential Fitness ( $XPOF (Xponential Fitness Inc) ) XPOF completed a refinancing that meaningfully extends maturities and improves liquidity. While the operational turnaround remains a work in progress, the balance sheet is now in a much better position to support stabilisation and gradual recovery. This improves the overall risk/reward profile. I trust that the new CEO will have a positive impact next year. 🔹 ProPetro ( $PUMP.US (ProPetro Holding Corp) ) ProPetro announced a new power contract alongside a financing facility to support the expansion of its Power Solutions business. This reinforces the strategic shift we have discussed previously, positioning the company as a beneficiary of rising power demand tied to electrification and AI-related infrastructure. Execution remains key, but momentum continues to build. 🔹 Antero Resources ( $AR.US (Antero Resources Corp) ) Antero announced the acquisition of HG Energy, strengthening its asset base and increasing scale. The transaction enhances inventory depth and operational flexibility, while maintaining balance-sheet discipline. In a consolidating energy landscape, scale and low-cost assets remain important advantages. 🔹 Broader portfolio context Our portfolio remains small cap, value focused and has exhibited lower correlation with indexes in the second part of the year. I also tightened things up and reduced risk across our holdings. I do feel excited about our prospects and expect further positive developments next year. 𝗜𝗜𝗜. 𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻 December did little to fundamentally change the broader picture. The economy continues to cool gradually, inflation appears contained for now, and policy remains supportive but increasingly constrained by credibility and political considerations. Markets are ending the year in an uneventful manner, though leadership remains narrow and valuations elevated in parts of the market. At the same time, many fundamentally sound companies tied to investment, infrastructure, energy, and services continue to trade at reasonable valuations. As we move into 2026, I remain constructive but attentive. Liquidity and investment trends are supportive but might soon reach a peak, while labour market dynamics, policy uncertainty, and valuation dispersion suggest a more volatile environment may lie ahead. As always, I welcome your thoughts and questions. All the best, Hugo

Not investment advice. The author may have financial interests in the mentioned instruments.

3 Mentioned

XPOF

Xponential Fitness Inc

PUMP.US

ProPetro Holding Corp

AR.US

Antero Resources Corp

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