Seeking Alpha·2025-11-12 02:00Economic Overview - Global equity markets experienced a strong third quarter, with the US economy benefiting from a pause in punitive tariffs and a capital investment boom in Artificial Intelligence (AI) [2] - The US GDP grew by 3.8%, with tech capital spending contributing up to half of this growth [2] - The aerospace and defense industry saw a boost from increased global defense spending, with military expenditures projected to rise from $2.7 trillion in 2024 to $6.6 trillion by 2035 [5] Market Performance - Major US indexes ended the quarter higher: Nasdaq Composite up 11.24%, S&P 500 up 8.12%, and Dow up 5.67% [2] - The S&P 500 is projected to report third-quarter earnings growth of over 10% year-over-year, down from 12.7% in the second quarter [2] - The S&P Aerospace & Defense Select Industry Index outperformed major benchmarks, gaining 11.92% in the third quarter [5] Sector Analysis - The technology sector continues to thrive, with companies like Alphabet, Microsoft, and Meta Platforms showing exceptional growth in cloud computing, AI, and digital advertising [9] - Aerospace and defense companies such as RTX, Boeing, and Lockheed Martin have raised their financial guidance for 2025 due to increased military spending [5] - Consumer-facing businesses are struggling due to tariffs and high inflation, impacting sectors like food and beverage [10] Investment Insights - The Auxier Focus Fund gained 5.35% in the third quarter, with a year-to-date return of 14.31% [6] - The fund's portfolio is heavily weighted in domestic equities (86.10%), with a focus on sectors benefiting from AI and industrial growth [6] - Companies like Corning and Caterpillar are experiencing strong demand due to infrastructure buildouts related to AI [8] Central Bank Actions - Global central banks have cut rates significantly, with 312 cuts reported by Bank of America, boosting foreign equities [4] - Central banks are also aggressively buying gold, with purchases exceeding 1000 tons annually in recent years, compared to a previous average of 400-500 tons [4]