Market Commentary - November 3, 2025
The Federal Reserve Lowers Rates And Ends Quantitative Tightening
The Federal Open Market Committee (FOMC) concluded its meeting last Wednesday, electing to lower the Fed funds rate by 25 basis points from a range of 4%–4 ½% to 3¾%–4%. In addition, the FOMC voted to end quantitative tightening (QT) on December 1. Under QT, the Fed has been reducing its balance sheet by selling or letting Treasury and agency securities – primarily mortgage-backed securities (MBS) accumulated during the Global Financial Crisis (GFC) – mature or roll off. QT is considered a form of tightening monetary policy. Stopping QT can be considered a form of monetary easing. In the news conference following the meeting, Fed Chair Jerome Powell said that the FOMC considers its recent cuts in rates as a move toward a more neutral policy stance to support what it sees as a labor market facing downside risks. So far, the Fed views the rise in consumer prices as a one-time effect of tariffs working their way into the economy, which is expected to continue into the spring. Powell also noted that housing costs and services were mildly deflationary. He commented that shelter inflationary costs have been coming down and are expected to continue to trend downward.
Market Commentary - October 27, 2025
The Treat This Week Should Be A Rate Cut By The Fed
As the government shutdown continues, the flow of economic data has also been shut down. Earnings have been the leading news for the markets. It’s still early in earnings season, but so far, the first wave of announcements has started with a bang, with most companies reporting earnings better than expected. This is a big week for earnings with most of the Magnificent 7 (Mag 7) companies reporting earnings: Alphabet, Microsoft, Meta, Amazon and Apple. Yet, the big news this week is the FOMC meeting with the market expecting a decision on Wednesday of a 25 basis point (bps) interest rate cut. As the market expects another 25 bps cut in December, all ears will be listening for comments that might confirm the continued cutting cycle. Attention will also be paid to comments about if/when the Fed will stop its Quantitative Tightening (QT). So far, the bond market is warming to the current rate cutting cycle as both the 2-year and 10-year Treasury yields have been falling. We expect the 2-year to track toward 3% and the 10-year toward 3.8%. This is helping mortgage rates to also come down, a trend we expect to continue into next year. If the mortgage rate nears 5%, the housing market should improve.
Perspectives - October 27, 2025
The Corner October 2025
Our work continues to support a secular bull market driven by economic growth, consumer spending, and transformative technologies. Corporate earnings continue to rise, proof it margins are still expanding, and the markets anticipate that the Federal Reserve (Fed) will cut short-term interest rates 25 basis points again this month. We believe this could boost the equity market and hasten economic activity. Our year-end target for the S&P 500 remains 7000, and we expect it will reach 7200 early next year. Our long-term target for this secular bull market is 10,000–13,000 for the S&P 500 by 2029–2030. This month, we will look at average stock market performance over a presidential term and the effects of revisions in nonfarm payrolls. We’ll then review the sectors in the U.S. equity market and briefly describe how to use the overbought/oversold list we publish every week.
Market Commentary - October 20, 2025
Spooky Headlines Create Buying Opportunity
Tariffs are nothing new to the markets, but they did get spooked by President Trump’s recent threat of additional tariffs on China. Earnings season started with the major banks announcing blowout positive earnings; the only negative headlines came from two regional banks. Zions Bancorp disclosed it would be taking a $50 million charge-off in Q3 tied to two commercial & industrial (C&I) loans in its California unit. Then Western Alliance disclosed it has sued Cantor Group V, LLC, accusing the firm of fraud in relation to a revolving credit facility. Meanwhile, JPMorgan Chase CEO Jamie Dimon opined during the firm’s Q3 earnings call that there are cockroaches in the economy. All this sent stocks down sharply. (Remember: corrections don’t happen on good news!) With the major banks posting strong earnings, the results reinforce that the broader banking system remains healthy — and that the problems facing those regional banks appear isolated and do not represent a systemic risk to the economy. As for tariffs, President Trump soothed equity markets Friday by admitting that his threatened tariffs on China “are not sustainable. We have been looking for a pullback of 5%-10% in the equity market since September, and we are in this pullback now. October creates buying opportunities for the seasonal year-end rally. We remain buyers on this pullback, looking for the S&P 500 to reach 7000 by year-end.
Sanctuary Wealth - October 16, 2025
Chart Book September 2025
U.S. stocks climbed strongly in September, with the S&P 500 up 3.6%, its fifth consecutive monthly gain and best September in 15 years. The index is now up 14.87% year-to-date and 34.2% above its April low. Technology and Communication Services led the rally, while Materials and Consumer Staples lagged amid sticky inflation. The Nasdaq gained 5.7%, and small caps rose 3.1%, with the Russell 2000 hitting its first all-time high since 2021. However, market breadth narrowed as large-cap stocks, particularly the “Magnificent 7,” up 9%, drove most of the gains, leaving the top 10 S&P 500 companies representing over 40% of the index. Emerging markets marked their ninth consecutive monthly gain, primarily driven by key regions like Asia, and improving investor sentiment for the asset class.
Market Commentary - October 13, 2025
The Correction Is Finally Here
Equity markets sold off last Friday, responding negatively to President Trump’s threat of a massive tariff hike on China amid escalating tensions over rare earth exports. His move followed Beijing’s decision to restrict shipments of those critical materials, prompting Trump to also threaten cancellation of his upcoming meeting with China’s President Xi Jinping. The S&P 500 fell 2.7% and the Nasdaq 100 declined 3.6% on the news. This pullback aligns with our expectation for a 5%–10% correction, with both indexes now at risk of testing their 200-day moving averages. October is traditionally known as a good buying opportunity leading into the seasonal year-end rally. We remain buyers and maintain that the S&P 500 can reach 7000 by end of the year and 7200 by early next year.
Perspectives - September 17, 2025
The Rise of Stablecoins
The rise of stablecoins is disrupting the global monetary system. Stablecoins, which are digital currencies pegged 1:1 to fiat currencies (e.g., the U.S. dollar), are rapidly transforming the global payment landscape by leveraging blockchain technology for fast, secure, and low-cost transactions. Unlike volatile cryptocurrencies, stablecoins such as Tether’s USDT and Circle’s USDC maintain stable value through their backing by U.S. Treasury bills, cash, short-term commercial paper and other relatively secure investments. This allows for near-instantaneous trade settlements at a fraction of the cost of traditional systems (e.g., SWIFT or CIPS). The recent passage of the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act in the United States establishes a robust legal framework for stablecoin issuance and regulation, mandating 1:1 backing with high-quality reserves. This legislation, alongside the Crypto-Asset National Security Enhancement and Liability for Investors and Transparency (CLARITY) Act and the Central Bank Digital Currency (CBDC) AntiSurveillance State Act, strengthens the U.S. dollar’s role as the world’s reserve currency while fostering innovation in digital payments. Stablecoins are increasingly adopted for international trade and commercial transactions, offering significant cost savings and efficiency over conventional banking systems.