Market Commentary - August 7, 2025
Dog Days Of Summer
As we head into August, the market is showing signs of fatigue. While the S&P 500 remains near record highs, the rally has lost some of its earlier energy. July’s jobs report came in light, with only 73,000 new payrolls added – well below expectations – and perhaps an early sign that the labor market is beginning to cool. Meanwhile, the Federal Reserve (Fed) opted to keep interest rates unchanged last week as expected, but the decision wasn’t unanimous. For the first time since 1993, two FOMC members dissented, voting in favor of a rate cut. The Fed’s current stance remains mildly restrictive, with ongoing balance sheet reduction quietly draining liquidity from the system, which is estimated to be about a 50-basis point tightening. Following the announcement of significant revisions in employment figures for June and May (downward of a combined 258,000 jobs!), along with surprisingly weak numbers for July, President Trump fired the head of the Bureau of Labor Statistics on Friday, and later that day, a member of the Federal Reserve Board resigned. In addition to all this, Trump announced tariffs against over 60 countries, ranging from 10% to 41% – they’re due to take effect on Thursday August 7. Markets responded with a decidedly cautious tone. However, we wouldn’t be surprised to see more volatility during August, a month known as a market peak that leads to a correction during the months of September and October.
Market Commentary - July 28, 2025
The Summer Sizzle Continues
Market reaction to President Trump’s barrage of tariffs appears to have gone from negative to neutral-positive at least for now, because as of this writing, Trump has just announced a 15% tariff on most imports from the European Union (EU). The deal also includes the EU agreeing to purchase $750 billion worth of U.S. energy and inject an additional $600 billion worth of investments into the U.S. above current levels. This deal is significantly larger than the deal with Japan. So far, the market is reacting positively.
Market Commentary - July 21, 2025
The Summer Melt Up… Will It Continue?
The summer rally is in full swing with a classic melt up – the euphoric flip side of a meltdown. We believe the equity market is looking past the tariffs and inflation data and focusing on economic growth and looking ahead at earnings into 2026. The One Big Beautiful Bill continues to provide money to the consumer and economy, and this is helping risk assets. The Generating Educational New Investment in U.S. Students (GENIUS) Act , which sets regulations for stablecoins, is driving the crypto market higher. Markets are firmly risk-on right now.
Perspectives - July 14, 2025
Mid Year Outlook
Buoyed by equity markets hitting record highs, we entered 2025 with strong optimism – but this outlook was quickly upended by the unexpected tariffs from the Trump Administration followed by a sudden escalation of war in the Middle East, which drew in the United States. The tariff battle led to a bear market sell-off of 20%, and the bombing of Iran by Israel and the U.S. saw oil prices rise sharply. But stocks quickly recovered, and oil fell just as sharply within days. It felt like we were in a warp drive of events. We also had a significant drop in inflation with interest rates trending down. So, as we enter the second half of 2025, equity markets are at new highs, interest rates continue to fall, the Middle East war has possibly turned to peace, and tariffs still need negotiations.
Market Commentary - July 14, 2025
Chart Book June 2025
The U.S. economy contracted by 0.5% in Q1 2025, a sharper decline than the earlier estimate of 0.2%, largely due to President Trump's trade tariffs disrupting business activity. A rush to import goods before tariffs took effect caused imports to surge 37.9%, subtracting nearly 4.7% from GDP. This marks the first economic contraction in three years, following 2.4% growth in Q4 2024. Consumer spending also slowed drastically, growing just 0.5%, compared to 4% in the previous quarter. A key measure of underlying economic strength—which excludes volatile components like exports and government spending—rose only 1.9%, down from 2.9% in Q4. Federal government spending fell 4.6%, its largest drop since 2022. Overall, the data reflects how tariff-driven trade disruptions and consumer anxiety are weighing on U.S. economic activity.
Market Commentary - July 14, 2025
Summer Brings New Record High
As we move deeper into the summer and the long lingering uncertainty of the “One Big Beautiful Bill” is now behind us, stocks have been charging to new highs on both the S&P 500 and Nasdaq 100. And though the Dow Jones Industrial Average (DJIA) has not yet hit its own new highs, we expect it will. Breadth and volume are confirming the ongoing rally, giving us confidence that the secular bull market is alive and well. We expect there will be more volatility as President Trump continues to negotiate more waves of tariffs. Plus, with the valuation of the S&P 500 at the upper end, investors are nervous.