Quality Stocks to Outperform in 2025

• The 2025 equity market theme will be "quality," favoring companies with strong balance sheets and cash flow over unprofitable ones.
• This is due to the Fed's stance on interest rates and its dependence on labor market conditions.
• A strong economy and high bond yields benefit quality names, while market instability also favors secure, strong balance sheet companies.
• Current market froth, with some companies trading at high valuations relative to sales, resembles the dot-com bubble, and its correction will likely favor stronger, higher quality names.