Jim Streight

Weekly Market Commentary

by Jim Streight | May 29, 2025 | Carson

The Markets

Nobody likes to balance the budget.

Some pundits said Moody’s rating downgrade of U.S. Treasuries was a nothing burger. After all, the rating change didn’t provide investors with any new information. Moody’s was the third rating service to lower U.S. government bond ratings. S&P Global downgraded U.S. Treasuries in 2011, and Fitch Ratings followed suit in 2023.

However, Moody’s decision focused attention on fiscal policy – the way the United States government taxes and spends. In 46 of the past 50 years, the U.S. government has run a deficit, meaning it has spent more than it received from taxes and other sources of revenue, reported FiscalData. Every annual deficit adds to the public debt, which is about $36 trillion, according to the U.S. Debt Clock.

The U.S. government finances annual deficits (and the overall debt) by issuing Treasury bills, notes, and bonds. The U.S. promises Treasury buyers (a group that includes individuals, institutions, and governments) that it will pay interest for a specific period and then repay the amount borrowed.

When yields increase, so does the amount of interest the United States must pay

When government bond buyers have concerns about a government’s fiscal policy, demand for bonds may fall and yields may rise. That happened to U.S. Treasuries last week. The yield on the 30-year U.S. Treasury bond exceeded five percent. “The move above 5 [percent] is striking because that has been the general cap on the 30-year for about two decades,” reported Karishma Vanjani of Barron’s.

While higher yields make U.S. Treasuries more attractive to investors, they also may create challenges for economic growth. “As the national debt grows and interest rates rise, the United States will spend more of its budget on the cost of servicing that debt – crowding out opportunities to invest in the economy,” reported The Peter G. Peterson Foundation.

The United States is already paying a hefty amount of interest. In 2024, interest payments on the U.S. debt were about $880 billion, more than the U.S. budget for national defense, reported Michael Mackenzie, Liz Capo McCormick, and Ye Xie of Bloomberg.

The U.S. isn’t the only country where yields are rising. “From the U.S. to Japan, long-term borrowing costs for the world’s biggest economies have surged as investors question the ability of governments to cover massive budget deficits,” reported Alice Gledhill and Mia Glass of Bloomberg.

Over the week, major U.S. stock indexes moved lower amid worries about rising yields and fiscal policy.Yields on longer maturities of U.S. Treasuries finished the week higher.

WHERE DO PEOPLE HAVE THE BEST QUALITY OF LIFE? Countries often measure success by comparing how much their economies produce. The United Nation’s Human Development Index (HDI) considers success from a different perspective by measuring quality of life. The index focuses on three fundamental aspects of human development: length of life, access to knowledge, and income.

The 2025 HDI, which reflects data from 2023, showed that many wealthy nations (97 percent) have regained or improved on their pre-pandemic HDI scores, while just 60 percent of poorer nations have recovered, reported The Economist. The countries with the best quality of life were:

Iceland,
Norway and Switzerland (tied),
Denmark,
Germany and Sweden (tied).

The countries with the lowest quality of life were:

Niger and Mali (tied),
Chad,
Central African Republic,
Somalia, and
South Sudan.

The United States ranked 17^th in the Index, tied with Liechtenstein and New Zealand. In 2023, U.S. life expectancy at birth was 79.3 years, and Americans could expect to complete about 15.9 years of school. U.S. gross national income – the total amount of money earned by people and businesses in the U.S. – per capita was $73,650. The ranking “puts the country in the Very High human development category,” stated the UN report.

Weekly Focus – Think About It

“The true test of character is not how much we know how to do, but how we behave when we don’t know what to do.”
– John Holt, Educator

Sources:

https://www.bloomberg.com/news/newsletters/2025-05-19/about-that-moody-s-downgrade? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Bloomberg-About-That-Moodys-Downgrade%20-%201.pdf

https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/6802837

https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023

https://www.federalreserve.gov/faqs/money_12855.htm#:

https://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/

https://www.usdebtclock.org

https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/#:~:text

https://www.barrons.com/articles/global-bond-treasury-selloff-yields-7c33f4c1?mod=article_inline or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Barrons-Global-Bond-Rout%20-%208.pdf

https://www.pgpf.org/our-national-debt/

https://www.bloomberg.com/news/articles/2025-05-21/treasury-yields-climb-auguring-5-rate-for-20-year-bond-auction or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Bloomberg-Bond-Market-Warns-Trump%20-%2010.pdf

https://www.bloomberg.com/news/articles/2025-05-22/long-term-bond-yields-soar-globally-on-fiscal-policy-fears or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Bloomberg-Long-Term-Bond-Yields%20-%2011.pdf

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Barrons-DJIA-S&P-Nasdaq%20-%2012.pdf

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

https://hdr.undp.org/data-center/human-development-index#/indicies/HDI

https://www.economist.com/graphic-detail/2025/05/06/which-countries-have-the-best-and-worst-living-standards or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Economist-Which-Countries-Best-Worst-Living-Standards%20-%2015.pdf

https://hdr.undp.org/data-center/country-insights#/ranks

https://hdr.undp.org/data-center/documentation-and-downloads or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-27-25-Human-Development-Reports%20-%2017.pdf

https://hdr.undp.org/data-center/specific-country-data#/countries/USA

https://www.goodreads.com/quotes/49110-the-true-test-of-character-is-not-how-much-we

Weekly Market Insights | Markets Cringe At Returned Tariff Talk

by Jim Streight | May 27, 2025 | Weekly Stock Market Commentary

Stocks moved lower last week as fiscal fears and fresh tariff threats loomed over market sentiment.

The Standard & Poor’s 500 Index fell 2.61 percent, while the Nasdaq Composite Index dropped 2.47 percent. The Dow Jones Industrial Average slid 2.47 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 1.14 percent.^1,2

Stocks Slip

On Monday, stocks were under a bit of pressure after credit rating agency Moody’s downgraded the U.S. as an issuer of government bonds.^3,4

Stocks remained under pressure midweek as Treasury yields moved higher with the 30-year bond hit a 19-month high. Investors fretted about the budget deficit; some feared the deficit would be made worse by the spending bill winding its way through Congress. After the House of Representatives approved the bill, bond yields backed off their highs and stocks went sideways.^5,6

On Friday, stocks dropped after President Trump warned of a 50 percent tariff on European Union goods following an apparent stall in trade negotiations. At the same time, the administration also threatened a 25 percent tariff on any iPhones manufactured outside of the U.S.⁷

Unexpected Tariff News

The president’s fresh tariff talk ended a week or so of relative tranquility on the trade front. While the EU tariff threat may end with a deal similar to deals with other countries and regions, the iPhone issue may prove stickier.

Some analysts estimate that making iPhones in the U.S. would increase manufacturing costs by as much as 50 percent, which might increase the price of an iPhone.⁸

This Week: Key Economic Data

Monday: Market Holiday

Tuesday: Durable Goods. New York Fed President John Williams and Minneapolis Fed President Neel Kashkari speak. Case-Shiller Home Price Index. Consumer Confidence.

Wednesday: Federal Open Market Committee (FOMC) Meeting Minutes. Neel Kashkari speaks.

Thursday: Gross Domestic Product (GDP). Jobless Claims (weekly). San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee speak. Fed Balance Sheet. Pending Home Sales.

Friday: Personal Consumption & Expenditures (PCE) Index. International Trade Balance in Goods. Atlanta Fed President Raphael Bostic and Austan Goolsbee speak. Retail and Wholesale Inventories. Consumer Sentiment.

^{Source: Investors Business Daily – Econoday economic calendar; May 23, 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

Wednesday: NVIDIA Corporation (NVDA), Salesforce Inc. (CRM)

Thursday: Costco Wholesale Corporation (COST), Dell Technologies Inc. (DELL)

^{Source: Zacks, May 23, 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.}

“You can’t destroy knowledge. You can stamp it under and burn it up and forbid it to be, but somewhere it will survive.”

– Leigh Brackett

Help Get Your Federal Withholding Correct With This Tool From the IRS

The IRS has a handy tool called the IRS Tax Withholding Estimator to help taxpayers better understand their withholding. It’s essential to examine your federal withholding periodically to ensure you are comfortable with the amount of tax withheld.

Checking your withholding status may be a good idea to consider if you have experienced a change that may affect your tax status, such as:

Going through a marriage or divorce

Having or adopting a child

Purchasing a new home

Working two or more jobs at the same time

Only working part of the year

Claiming credits such as the child tax credit

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

Tip adapted from IRS⁹

What is Sleep Hygiene?

We all want a better night’s sleep, and your sleep hygiene routine might impact the amount and quality of shut-eye you get. Sleep hygiene refers to your habits to get a good night’s sleep. The better your habits, the better your chances are of improving your sleep.

Here are some good sleep hygiene tips:

Be consistent with your sleeping and waking times, even on weekends!

Make sure your bedroom is dark, quiet, and of a comfortable temperature

Invest in blackout curtains or a white noise machine to drown out light and sound

Avoid electronic devices, including phones and TV, at least an hour before bed

If your appliances have a “night” mode, switch this on a few hours before bed to reduce blue light

Make sure to get enough exercise during the day, which may help you fall asleep faster

Tip adapted from Centers for Disease Control and Prevention¹⁰

It has dozens of fine teeth, but you can hold it in your hand, and it will never bite you. What is it?

Last week’s riddle: What can go down a chimney when it is down but can’t go up through a chimney when it is up?
Answer: An umbrella.

View of Guatapé
Piedra del Peñol, Colombia

Footnotes and Sources

^{1. WSJ.com, May 23, 2025}

^{2. Investing.com, May 23, 2025}

^{3. CNBC.com, May 19, 2025}

^{4. CNBC.com, May 20, 2025}

^{5. CNBC.com, May 21, 2025}

^{6. CNBC.com, May 22, 2025}

^{7. WSJ.com, May 23, 2025}

^{8. MarketWatch.com, May 23, 2025}

^{9. IRS.gov, August 20, 2024}

^{10. CDC.gov, December 12, 2024}

This Memorial Day….

by Jim Streight | May 23, 2025 | Most Popular, Noteworthy

Memorial Day is so much more than a long weekend.

It is a chance for us to remember those who gave all for this great nation and the freedoms it offers.

This Memorial Day, we pay tribute to the lives and legacies of those who made the ultimate sacrifice in serving our country, and we honor their courage.

Wishing you and yours a peaceful Memorial Day.

Market Commentary

by Jim Streight | May 22, 2025 | Carson

The Markets

Last week, the U.S. stock market showed why it’s a good idea to stay invested through bouts of volatility.

Major U.S. stock indices notched sizeable gains as investors celebrated a trade truce with China and better-than-expected inflation numbers, while brushing off a tepid consumer sentiment reading. Here’s what happened:

The administration negotiated a trade truce with China. The United States and China agreed to reduce tariffs for 90 days. U.S. tariffs on Chinese imports will fall to 30 percent, while China’s tariffs on U.S. imports will drop to 10 percent. The Wall Street Journal reported, “The agreement lowered tariff levels far more than Wall Street had expected, with one analyst…calling the deal a ‘best-case scenario’ for investors. Goldman Sachs cut its U.S. recession odds to 35 [percent] from 45 [percent] and boosted its growth forecast.”

Inflation is closing in on the Federal Reserve’s target. Prices increased by 2.3 percent year over year in April. That put headline inflation just a smidge above the Fed’s two percent target. When the volatile categories of food and energy were excluded, prices were up 2.8 percent year over year. The price of eggs fell by 13 percent month to month leading a decline in the cost of food. Five of six major grocery store food group indexes moved lower in April.

Consumers were concerned about inflation. While the Consumer Price Index’s April inflation numbers were encouraging, the inflation numbers in the University of Michigan’s Consumer Sentiment Survey were less so. “Year-ahead inflation expectations surged from 6.5 [percent] last month to 7.3 [percent] this month…Long-run inflation expectations lifted from 4.4 [percent] in April to 4.6 [percent] in May…,” reported Surveys of Consumers Director Joanne Hsu.

The U.S. bond market was in a less cheerful mood than the U.S. stock market last week. On Friday, Moody’s lowered the rating for U.S. government bonds on concerns about the deficit (the difference between how much the government spends each year and how much it takes in through taxes) and rising interest costs. The rating service explained:

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs. We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

Over the week, U.S. stock markets saw solid gains with the Standard & Poor’s 500 Index moving into positive territory for the year to date. U.S. Treasury yields ended the week near where they started.

WHAT DO YOU KNOW ABOUT MEMORIAL DAY? Memorial Day offers a blend of celebration and remembrance. It’s the time when we honor the men and women who bravely sacrificed their lives in service to the United States of America. The holiday reminds us that freedom is not free and gives us an opportunity to remember those who fought and died defending our country. See what you know about Memorial Day by taking this brief quiz.

How do we remember the fallen on Memorial Day?
1. Flying the flag at half mast
2. Participating in The National Moment of Remembrance
3. Placing flags and flowers in cemeteries
4. All of the above

What type of flower is traditionally worn on Memorial Day?
1. A sunflower
2. A poppy
3. A chrysanthemum
4. A rose

The Medal of Honor is the United States’ highest award for military valor in action. More than 3,500 soldiers, sailors, airmen, guardians, marines, and coast guards have received the honor. How many double Medal of Honor recipients have there been?
1. 7
2. 12
3. 19
4. 22

Visitors to military cemeteries on Memorial Day may see coins on headstones. The type of coin left behind has significance. When a person leaves a nickel on the headstone of a service member, it means they:
1. Appreciate the veteran’s service
2. Trained together at boot camp
3. Served together
4. Were there when the veteran died

How do you celebrate Memorial Day?

Weekly Focus – Think About It

“Heroism doesn’t always happen in a burst of glory. Sometimes small triumphs and large hearts change the course of history. Sometimes a chicken can save a man’s life.”
– Mary Roach, Author

Answers: 1) d; 2) b; 3) c; 4) b

Sources:

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-19-25-Barrons-DJIA-S&P-Nasdaq%20-%201.pdf

https://www.wsj.com/livecoverage/stock-market-today-tariffs-trade-war-05-12-2025 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-19-25-WSJ-US-China-Agree-to-Large-Tariff-Cuts%20-%202.pdf

https://www.bls.gov/news.release/pdf/cpi.pdf [report and Table 2]

https://www.cnbc.com/2025/05/14/cnbc-daily-open-tame-cpi-in-april-banishes-stagflation-threat-for-now.html

https://www.sca.isr.umich.edu

https://ratings.moodys.com/ratings-news/443154

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

https://www.memorialdayfoundation.org/education/how-to-observe-memorial-day/

https://www.rd.com/article/memorial-day-poppies/

https://www.cmohs.org/recipients/lists/double-recipients

https://dma.mt.gov/MVAD/MVAD-Images/Coins-on-headstones-meaning.pdf

https://www.goodreads.com/quotes/7682393-heroism-doesn-t-always-happen-in-a-burst-of-glory-sometimes

Weekly Market Insights | U.S./China Tariff Truce Tames Markets

by Jim Streight | May 21, 2025 | Weekly Stock Market Commentary

Stocks roared higher last week, powered by upbeat trade news and tame inflation reports.

The Standard & Poor’s 500 Index rose 5.27 percent, while the Nasdaq Composite Index spiked 7.15 percent. The Dow Jones Industrial Average added 3.41 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.^1,2

S&P, Dow Erase YTD Losses

Stocks pushed higher on Monday as investors cheered weekend news that the U.S. and China temporarily agreed to back off steep reciprocal tariffs.³

Then, a mild inflation report for April—the slowest annualized Consumer Price Index (CPI) reading in four years—boosted markets on Tuesday. Tech stocks powered the rally as the S&P 500 closed trading in the green for the year.^4,5

Markets closed the week with modest gains, largely looking past weak consumer sentiment data released on Friday.

Friday was the Dow’s turn to erase year-to-date losses and get back in the green while the Nasdaq and S&P notched a five-day winning streak.⁶

All Eyes on Economic Data

The retail (CPI) and wholesale inflation reports (Producer Price Index) were mild, although most economists didn’t expect tariffs to impact prices in the first month of implementation.

Retail sales ticked up slightly (as expected), while industrial production and housing starts showed signs of tariff impact.^7,8

Expect traders to continue to closely watch economic reports to better understand whether tariffs are showing up in the data.