July 6, 2025
Volume 12, Issue 27
Weekly Recap
The major domestic stock indexes traded higher last week. Smaller-cap indexes performed best, with the S&P MidCap 400 and Russell 2000 climbing 2.85 and 3.52 percent, respectively, followed by the Dow Jones Industrial Average, which advanced 2.30 percent. The S&P 500 and Nasdaq Composite both closed at all-time highs for the second week in a row. Much of the focus during the week centered around the progress of the Trump administration’s reconciliation bill, which was narrowly passed by the Senate on Tuesday and by the House of Representatives on Thursday afternoon. Trade-related headlines also continued to flow during the week, with President Trump announcing a trade deal with Vietnam on Wednesday and making comments around negotiations with several other trade partners ahead of the president’s upcoming July 9 tariff deadline, when he has said the 90-day pause on reciprocal tariffs would end.
In terms of economic data (and there was a lot of it), the Labor Department reported that the U.S. economy added 147,000 jobs in June, ahead of economists’ estimates and up from May’s upwardly revised reading of 144,000. The unemployment rate ticked lower to 4.1 percent, while average hourly earnings grew 0.2 percent month over month.
The jobs report came as a welcome surprise following Wednesday’s weaker-than-expected data from payroll processing firm ADP, which showed private payrolls contracted by 33,000 in June against estimates for a gain of around 115,000. This was the first negative reading since March 2023 and was driven by “a hesitancy to hire and a reluctance to replace departing workers,” according to Nela Richardson, chief economist at ADP.
Elsewhere, the Labor Department reported on Tuesday that job openings rose to 7.8 million in May, up from April’s reading of 7.4 million and the highest level since November. Accommodation and food services had the largest increase in openings, followed by finance and insurance. Initial jobless claims for the week ended June 28 also came in better than expected at 233,000, down 4,000 from the prior week’s revised level. Activity in the U.S. manufacturing sector contracted for the fourth consecutive month in June, according to a report from the Institute for Supply Management. The ISM’s manufacturing purchasing managers’ index was 49 percent, up from May’s reading of 48.5 percent and just shy of estimates for 49.1 percent (readings below 50 percent indicate contraction). According to Susan Spence, chair of the ISM Manufacturing Business Survey Committee, “activity slowed its rate of contraction, with improvements in inventories and production the biggest factors in the 0.5-percentage-point gain.”
Meanwhile, the services sector returned to growth after contracting for the first time in 11 months in May, registering a June PMI reading of 50.8 percent. The rebound was largely attributed to improvements in business activity and new orders. The Prices Index eased 1.2 percentage points from May but remained solidly in expansion territory – indicating rising prices – with a reading of 67.5 percent, the second-highest reading since November 2022 and the seventh consecutive month above 60 percent. Yields of U.S. Treasury securities were little changed overall through Wednesday, although yields fluctuated in response to the week’s mixed economic data. On Thursday, yields across most maturities increased in response to the better-than-expected jobs report. The belly of the yield curve was hurt the most.
Market Monitor
A full listing of market performance data is available here.
DQYDJ.com (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual stocks. Koyfin.com provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.
In the News
President Trump’s trade policies and rising debt levels have sparked the dollar’s decline of more than 10 percent in first half of 2025, its worst start to year since 1973.Employers added 147,000 jobs in June, and the unemployment rate ticked down to 4.1 percent, suggesting that tariffs, interest rates and other headwinds are not yet causing employers to pull back significantly. A stable labor market fortifies the Federal Reserve’s case that it does not need to be in a hurry to lower borrowing costs, keeping the central bank on course to extend its pause on interest rate cuts when it meets later this month. Behind the numbers, however, there are reasons for concern. Private U.S. employment fell in June for the first time in more than two years.
Senior Iranian officials, in a private call intercepted by the U.S., said that American airstrikes targeting three Iranian nuclear sites were not as devastating as initially expected, The Washington Post reported on Sunday. White House press secretary Karoline Leavitt responded by claiming the intercepted communications were taken “out of context,” adding that “the notion that unnamed Iranian officials know what happened under hundreds of feet of rubble is nonsense” and that “their nuclear weapons program is over.” Though President Trump previously said Iran’s three major nuclear facilities were “completely and fully obliterated,” an initial assessment by the Defense Department’s Defense Intelligence Agency reportedly indicated the U.S. airstrikes only set back Iran’s nuclear program a few months, a conclusion the White House said was “flat-out wrong.”
Gen Z is contributing to their 401(k)s much earlier than millennials did, reports show, and young women are being particularly aggressive about saving.
Asset managers are eagerly awaiting an SEC. decision that would allow mutual funds to also trade as ETFs, potentially changing how trillions of dollars are invested.
Thanks to auto-enrollment, default escalation, and simplified plan designs, American workers are saving more than ever. According to Vanguard’s latest report, the average total savings rate in employer retirement plans has hit an all-time high of 11.7 percent, proving that smart plan design does, in fact, drive better long-term outcomes for retirement readiness. The personal savings rate in the U.S. averaged 4.7 percent in 2024. This is compared to the average (since 1959) of 8.4 percent. Making matters even more troubling, Americans seem to be getting worse, not better, at saving for their future. A shocking number of people are unprepared for retirement – what you should know.
Charts of the Week
I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.
- Investment Quarterly (Q2 2025)(Madison Avenue Securities)
- Guide to the Markets (Q3 2025)(JPMorgan Asset Management)
- A Perfect Storm Is Poised to Raise Long-Term Care Costs (Mark Miller)
- Difficult for First-Time Home Buyers to Enter the Housing Market (Torsten Slok)
- 11 Reasons Why People Hire Advisors (Sydney Squires)
This is the best thing I’ve read recently. The smartest. The most interesting. The least surprising. The math of compounding is confounding. Predicting a crisis. Youth sports fraud. Cheating. Ketchup. Hot dogs.
Forty-seven percent of U.S. grandchildren live within ten miles of a grandparent. A total of 21 percent of grandchildren live within one and five miles, while fully 13 percent live within a mile of the grandparents. That last number is the same figure as the number of grandchildren who live 500 miles or more away.
“The world is changed by your example, not your opinion.”
~ Paulo Coelho
Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets.
Additional Source – CNR Speedometers® | City National Rochdale
