Weekly Market Commentary

The Markets
Like riders on a giga coaster, investors experienced fear and exhilaration during the second quarter of 2025.

From April through June, investors rode markets up and down, banking through twists of news and events that had market moving potential. They swooped through the uncertain impact of tariffs on economic growth and inflation; the implications of a U.S. Treasury downgrade; the effects of fiscal policy changes in the Big Beautiful Bill; and conflicts in Ukraine and the Middle East. Here are some highlights from the quarter:

 Tariff turmoil. In early April, President Trump announced tariffs on a much larger scale than anyone expected, startling investors and raising concerns about economic growth and price inflation, reported Sarah Hansen of Morningstar. The CBOE Volatility Index (VIX), which is known as Wall Street’s fear gauge, shot up to 60. (Any reading above 30 signals a high level of fear, risk, and anticipated volatility.) As the VIX rose, the stock market fell.

 “The Dow shed 2,000 points in a day for the fourth time in the index’s history. All told, U.S. stocks shed some $6.6 trillion in market cap in the past two days based on preliminary figures…That’s the largest two-day market cap slide for U.S. listed stocks on record,” reported Connor Smith of Barron’s.

  • A fast recovery. President Trump delayed immediate action on tariffs, opening the door to trade negotiations. His actions reassured investors, and U.S. stocks climbed to new highs. Through last week, “The S&P 500 is up 26 [percent] from the selloff low on April 8, while the Nasdaq has surged 34.9 [percent], as the worries, from supersized tariffs to the U.S.’s artificial-intelligence dominance, have slowly faded,” reported Teresa Rivas of Barron’s.

 International stocks performed even better than U.S. stocks did. “European stocks, a thoroughly unloved asset class in January, have trounced the S&P 500 by 16 percentage points in dollar terms, the biggest outperformance since 2006…After underperforming the US market every year since 2017, developing-country equities are finally winning, helped by a boom in [artificial intelligence] companies from Taiwan, South Korea and China,” reported Alice Gledhill, Malavika Kaur Makol and Sagarika Jaisinghani of Bloomberg.

  • Excellent earnings growth. During earnings season, companies let investors know how they performed in the previous quarter. Collectively, companies in the Standard & Poor’s (S&P) 500 Index reported earnings growth of 12.9 percent for the first quarter of 2025. It was the second consecutive quarter of double-digit earnings growth, reported John Butters of FactSet. (Earnings are a measure of profitability.)

 Tariffs were the hot topic on earnings calls. They were mentioned by 427 S&P 500 companies. Some companies were concerned about tariffs. Some were not. The head of a financial firm told Sabrina Escobar of Barron’s, “The simple truth today is that we don’t yet know where trade policy will settle, nor do we know what the actual transmission effects will be on the real economy.”

  • The U.S. Federal Reserve (Fed) kept rates unchanged. Despite significant pressure from the administration to stimulate the economy by lowering rates, the Fed left the federal funds rate unchanged. At the end of the quarter, inflation was near the Fed’s two percent target and unemployment remained low. Both suggest the economy remains resilient.

Major U.S. stock indexes continued to move higher last week, with the S&P 500 and Nasdaq finishing the week at record highs. Yields on U.S. Treasuries moved higher last week after a stronger-than-expected employment report lowered expectations that the Fed might cut the federal funds rate in July, reported Sean Conlon, Alex Harring, and Sawdah Bhaimiya of CNBC.

PATRIOTIC FEELINGS. Last week, Americans celebrated the Fourth of July. Independence Day has been a national holiday since 1941, but the tradition began long before that. Americans have been celebrating Independence Day since “the 18th century and the American Revolution. On July 2nd, 1776, the Continental Congress voted in favor of independence, and two days later delegates from the 13 colonies adopted the Declaration of Independence, a historic document drafted by Thomas Jefferson. From 1776 to the present day, July 4th has been celebrated as the birth of American independence, with festivities ranging from fireworks, parades and concerts to more casual family gatherings and barbecues,” according to History.com.

A recent survey asked Americans about the Fourth of July, patriotism and the American Dream. Here’s what they said:

 

  • The 4th of July is a time for fun and relaxation:

63 percent

  • I am patriotic:

71 percent

  • I believe other Americans are patriotic:

74 percent

  • I am proud to be an American:

68 percent

  • Voting is a duty:

21 percent

  • Voting is a right:

31 percent

  • The American Dream is attainable for me:

36 percent

  • The American Dream is attainable for others:

32 percent

 

WEEKLY FOCUS – THINK ABOUT IT
“This is your democracy. Make it. Protect it. Pass it on.”
― Thurgood Marshall, Former Supreme Court Justice

Sources:

https://www.barrons.com/articles/stock-market-fed-rate-cuts-d0252a07?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-Stocks-Are-Flying-the-Dollar-is-Falling%20-%201.pdf

https://www.morningstar.com/markets/13-charts-q2s-major-market-rebound

https://finance.yahoo.com/news/cboe-volatility-index-vix-measured-153231819.html

https://www.cboe.com/tradable_products/vix/ [Video 1:15]

https://www.barrons.com/livecoverage/stock-market-today-040425 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-Nasdaq-Enters-Bear-Market%20-%205.pdf

https://www.barrons.com/articles/stock-market-hits-record-highs-tax-bill-jobs-6f818d48? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-Stocks-Hit-Record-Hights%20-%206.pdf

https://www.bloomberg.com/news/newsletters/2025-06-30/rollercoaster-first-half-is-ending-with-stocks-at-records or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Bloomberg-Rollercoaster-First-Half-Is-Ending%20-%207.pdf

https://insight.factset.com/earnings-insight-infographic-q1-2025-by-the-numbers

https://www.barrons.com/articles/tariffs-earnings-calls-stock-ccab0e3b or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-CEOs-Are-Saying-These-2-Ominous%20-%209.pdf

https://www.federalreserve.gov/newsevents/pressreleases/monetary20250618a.htm

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-DJIA-S&P-Nasdaq%20-%2011.pdf

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025

https://www.cnbc.com/2025/07/03/us-treasury-yields-investors-await-junes-big-jobs-report-.html

https://www.history.com/articles/july-4th

https://d3nkl3psvxxpe9.cloudfront.net/documents/July_Fourth_poll_results.pdf

https://www.usatoday.com/story/news/2024/06/19/patriotic-quotes-america-usa/74070993007/#

Weekly Market Insights | Trade and Jobs Cheer Markets in Short Holiday Week

Trade developments and continued momentum pushed all three major averages to modest gains again for a shortened holiday trading week.

The Standard & Poor’s 500 Index rose 1.72 percent, while the Nasdaq Composite Index added 1.62 percent. The Dow Jones Industrial Average advanced 2.30 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.19 percent for the week through Thursday.1,2

Stocks Gain on Trade Developments

Stocks continued their momentum from the prior week’s records following Canada’s rescinding of its digital services tax, rising on optimism as investors waited for more news on trade.3

The S&P 500 and Nasdaq took a breather on July’s first trading day, while the Dow Industrials posted a modest gain. Then, stocks rallied after the news of the trade deal with Vietnam, moving past the latest ADP employment report, which showed reduced jobs last month for the first time in two years.4

In a quick retort to the ADP report, a better-than-expected June jobs report from the Bureau of Labor Statistics gave stocks another boost, reassuring investors that the U.S. economy was weathering trade and geopolitical shocks. The S&P and Dow hit record highs as the short trading week ended.5

Jobs Report Mostly Positive

The labor report for June had a few points for investors to cheer. First, employers added 147,000 jobs in June—that was 37,000 higher than economists were expecting. Unemployment ticked down to 4.1 percent from 4.2 percent. Previously reported job gains from April and May were revised upward by 16,000.6

Still, companies are in a “no hire, no fire” mode as they wait to see how trade policy impacts the economy. Caveats to the headline numbers: most gains were seen in government and healthcare. Several other sectors, including manufacturing and professional services, were flat or diminished.6

The takeaway: good news overall, but uncertainty still lingers beneath the employment surface.

This Week: Key Economic Data

Tuesday: NFIB Small Business Optimism Index. Consumer Credit.

Wednesday: Wholesale Inventories. 10-Year Treasury Note Auction. June Fed Meeting Minutes.

Thursday: Weekly Jobless Claims. St. Louis Fed President Alberto Musalem and San Francisco Fed President Mary Daly speak.

Friday: Federal Budget.

Source: Investors Business Daily – Econoday economic calendar; July 3, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

No major companies reporting this week.

Source: Zacks, July 3, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

“People are like stained-glass windows. They sparkle and shine when the sun is out, but when the darkness sets in, their true beauty is revealed only if there is a light from within.”

– Dr. Elisabeth Kübler-Ross

Tax-Deductible Educator Expenses

The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies, and training from their taxes. In this case, an “eligible educator” is a taxpayer who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide. They must work at least 900 hours a year at a school that provides elementary or secondary education. 

Educators can deduct up to $300 of trade or business expenses not reimbursed by their employer, a grant, or another source. Some examples of covered expenses include:

  • Professional development course fees

  • Books
  • Supplies
  • Computer equipment
  • Other classroom equipment
  • Personal protective equipment (masks, disinfectant, etc.)

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. 

Tip adapted from IRS7

Choose In-Season Produce This Fall

Eating healthy is essential to keep you and your family feeling good as the days get shorter and the temperature drops. One of the easiest ways to incorporate fresher, riper produce into your meals is to buy in-season items. Generally, in-season produce, harvested at the right time, is full of flavor and nutrition. Plus, sometimes fruits and veggies cost less when they’re in season!

Here are some healthy picks for the fall:

  • Apples

  • Beets
  • Brussels Sprouts
  • Carrots
  • Cauliflower
  • Pumpkin
  • Winter squash
  • Raspberries
  • Celery

What are some of your favorite fall produce items?

Tip adapted from US Department of Agriculture8

Alexandra’s mom had four children. The first one was named May, the second was named June, and the third was named August. What was the fourth child’s name?

Last Week’s Riddle: It can be told, played, and cracked, and it can even be practical. What is it?
Answer: A joke.

Mt Cook
South Island, New Zealand

Footnotes and Sources

1. WSJ.com, July 3, 2025

2. Investing.com, July 3, 2025

3. CNBC.com, June 30, 2025

4. WSJ.com, July 2, 2025

5. CNBC.com, July 3, 2025

6. WSJ.com, July 3, 2025

7. IRS.gov, November 8, 2024

8.  SNAP-Ed Connection, U.S. Dept. of Agriculture, March 18, 2025

Take a Timeout from Tariff Talk

When Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful,” he wasn’t just talking about investing.

He championed contrarian thinking and urged people to capitalize when groupthink can result in emotional extremes.

How do you define an “emotional extreme?” Let’s look at how often people search for the term “tariff” on a popular search engine. 

I don’t know if Warren would consider today’s hyperfocus on tariffs greedy or fearful, but I’m certain he would see it as extreme.

So, if you see stock prices rally on tariff news—or fall as the tariff story unfolds—remember today’s chart.  It shows that people are searching for tariff information, so they may overreact when interpreting an update.

LMK if you are concerned about what’s next with tariffs. Better yet, let me know if you see anything that you consider an “emotional extreme” in the financial world.

trends.google.com, March 27, 2025. “Interest Over Time”

Weekly Market Insights | Markets Hold Broad-Based Rally

Stocks staged a broad-based rally last week on investors’ hopes for a lasting Middle East ceasefire, hitting fresh record highs along the way.

The Standard & Poor’s 500 Index rose 3.44 percent, while the Nasdaq Composite Index added 4.25 percent. The Dow Jones Industrial Average advanced 3.82 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 3.04 percent.1,2

Stocks Push Higher

Last week opened with a rally powered by news of a tamer-than-expected escalation of tensions in the Middle East. Stocks continued their rise after this week’s ceasefire agreement, although Wall Street appeared concerned about whether the truce would remain in place.3,4

Sentiment brightened after the White House played down the approaching July 8 tariff deadlines. Solid corporate earnings, a still-strong labor market, and a recovery in artificial intelligence-related stocks provided some underlying strength to the rally.5

As the week wrapped up, the S&P 500 hit its first new high since February—it marked the fastest-ever recovery from a 15-percent decline for the broad-market index. The tech-heavy Nasdaq Composite also closed at an all-time high.6,7

 

Economic Data Helped, Too

While trade and Middle East updates powered most of the markets’ rise last week, a few economic bits of news also contributed to the week-long rally. For example, consumer sentiment climbed 16 percent in May—its first increase in six months.8,9

“The improvement was broadbased across numerous facets of the economy, with expectations for personal finances and business conditions climbing about 20% or more,” the University of Michigan said in a statement.

This Week: Key Economic Data

Monday: Fed Officials Raphael Bostic and Austan Goolsbee speak.

Tuesday: Fed Chair Jerome Powell speaks. ISM Manufacturing Index. Construction Spending. Job Openings.

Wednesday: Motor Vehicle Sales. ADP Employment Report.

Thursday: U.S. Employment Report. International Trade in Goods & Services. Fed Official Raphael Bostic speaks. Factory Orders. ISM Services Index. 10-Year Treasury Note Announcement. Federal Balance Sheet.

Friday: MARKET HOLIDAY

Source: Investors Business Daily – Econoday economic calendar; June 27, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Tuesday: Constellation Brands Inc. (STZ)

Source: Zacks, June 27, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

“There is nothing in a caterpillar that tells you it’s going to be a butterfly.”

– Buckminster Fuller

How to Find Tax Help in Other Languages

The IRS currently translates important and helpful tax information using seven languages, including:

  • Spanish
  • Chinese (Traditional)
  • Chinese (Simplified)
  • Korean
  • Russian
  • Vietnamese
  • Haitian Creole

Some multilingual resources include The Taxpayer Bill of Rights, important filing information, e-file resources, forms and publications, and the IRS2Go mobile app.

To access information in these languages, taxpayers can click on the English dropdown tab in the top menu on the IRS.gov home page. The dropdown will list the other languages where taxpayers can view IRS.gov pages. In addition, the IRS offers interpreter services in more than 350 languages.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. 

Tip adapted from IRS10

What is Pickleball?

Pickleball has taken the world by storm, and for a good reason! The game is easy to play, great exercise, and you can play at many levels.

Pickleball combines tennis, ping pong, and badminton elements to create an addictive and fun sport. To play, you hit a Wiffle ball (a plastic ball with holes) with a paddle on a badminton-sized court. Pickleball has some unique rules, but it offers simple gameplay and is deeply enjoyable overall. 

If you want to start playing pickleball, check out your local parks and tennis courts! Increasingly, areas offer open play, rec leagues, and lessons for players of all levels. 

Tip adapted from USA Pickleball11

It can be told, played, and cracked, and it can even be practical. What is it?

Last Week’s Riddle: What do the words civic and level have in common?
Answer: They are both palindromes.

Osaka, Japan

Footnotes and Sources
1. WSJ.com, June 27, 2025
2. Investing.com, June 27, 2025
3. CNBC.com, June 23, 2025
4. CNBC.com, June 24, 2025
5. WSJ.com, June 18, 2025
6. WSJ.com, June 27, 2025
7. WSJ.com, June 27, 2025
8.  WSJ.com, June 24, 2025
9. UMich.edu, June 27, 2025
10. IRS.gov, November 18, 2024
11. USA Pickleball, December 12, 2024

Investment Ponderings from Jack Reutemann

At dinner this past week with a long-time client, I was asked what I thought of Jim Cramer.  I kindly said, “He’s a great speaker, entertainer, and educator, but I’m not sure of his investment advice track record, let me dig up the facts for you.”

An Examination of a Prominent Financial Pundit’s Forecasting Record

A well-known figure in financial media appearing on CNBC’s Mad Money program, Jim Cramer who is often seen as a financial guru, frequently offers his opinions on stock market movements and specific investment opportunities. While his pronouncements often grab headlines and can immediately sway certain stock prices, a deeper look into his long-term prediction accuracy reveals a more nuanced, and often debated, picture.

In the short term, there’s evidence that companies he highlights can experience an initial bump in value, sometimes seeing gains of over a percent in the hours immediately following his televised endorsements. However, this effect tends to be fleeting and does not consistently translate into superior performance over extended periods. When examining the trajectory of his recommended stocks over several months, their collective performance generally aligns with broader market indices, indicating no consistent advantage over simply holding a market-tracking fund.

Analyses of his written investment calls suggest that his success rate hovers slightly below what one might achieve through pure chance, and falls short when compared to other market strategists. A detailed review of hundreds of his “buy” and “sell” suggestions showed that while he might be correct in about three out of five immediate instances, his precision declines significantly after just a month, often leading to negative average returns. Interestingly, his advice to sell stocks sometimes fared better than his “buy” calls, though even then, his correct “sell” predictions were only accurate about 42% of the time over a longer duration.

This commentator has also been associated with several high-profile misjudgments, such as his positive outlook on a bank shortly before its collapse or repeated misinterpretations of a major cryptocurrency exchange’s stock performance. These errors have fueled a popular counter-strategy, where some investors actively bet against his public recommendations, dubbing it the “Inverse” effect. Instances exist where his “sell” advice was followed by considerable gains in those very stocks, further highlighting a lack of consistent foresight.

Within investment circles, his frequent miscalls have become a running jest, inspiring even financial products designed to capitalize on taking the opposite side of his positions. His animated and dramatic presentation style is often perceived as prioritizing entertainment value over consistently sound financial guidance.

In summary, while this high-profile financial personality undeniably wields short-term influence over stock movements, his long-term ability to accurately predict market direction or consistently outperform the market remains unsubstantiated. His forecasting precision tends to be inconsistent, marked by notable misjudgments. Therefore, investors should exercise caution and avoid solely relying on his pronouncements for their long-term investment decisions.

Ultimately, for long-term financial growth, it’s crucial to have a financial advisor who genuinely understands your unique situation and personal goals. Sustainable wealth building stems from a tailored strategy and disciplined approach, not from chasing risky, short-term stock plays based on televised commentary.

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