June 15, 2025
Volume 12, Issue 24
Weekly Recap
U.S. stocks declined last week. Smaller-cap indexes fared worst, with the S&P MidCap 400 and Russell 2000 falling 1.46 percent and 1.49 percent, respectively, while the Dow Jones Industrial Average shed 1.32 percent and dropped back into negative territory for the YTD. The S&P 500 and Nasdaq Composite fell to a lesser extent and remained positive so far this year. The major indexes were broadly higher through Thursday, buoyed by some better-than-expected economic data releases as well as reports that trade talks between the U.S. and China had led to a preliminary agreement to ease recent trade tensions. Several other optimistic trade-related headlines appeared to boost sentiment during the week, including comments from Treasury Secretary Scott Bessent that indicated the Trump administration’s 90-day pause on tariffs could be extended for countries negotiating in “good faith.”
However, sentiment quickly turned negative on Friday morning on news that Israel had launched a series of airstrikes targeting Iran’s nuclear facilities and military leaders, with a pledge of more attacks to come, to which Iran reportedly responded with a retaliatory attack later on Friday. The significant escalation in tensions sent oil prices surging, benefiting energy stocks, while the broader indexes fell sharply and gave back gains from earlier in the week. Gold jumped to a record high and the dollar rallied.
In addition to positive trade news, optimism early last week appeared to be partially supported by the Bureau of Labor Statistics’ report of cooler-than-expected inflation in May. On Wednesday, the BLS reported that its consumer price index rose 0.1 percent month-over-month, down from 0.2 percent in April and below consensus expectations for a 0.3 percent increase. On a year-over-year basis, prices rose 2.4 percent, up from April’s four-year low of 2.3 percent but below expectations for a 2.5 percent increase. Core CPI, which excludes volatile food and energy costs, rose 2.8 percent year over year, unchanged from April and a tick below consensus estimates of a 2.9 percent increase.
Meanwhile, inflation at the wholesale level also undershot expectations in May, with the BLS’s producer price index rising 0.1 percent during the previous month. This was up from a modest decline for the index in April but below estimates for a 0.2 percent increase, an indication that the price impact from tariffs thus far has been more muted than many market participants were anticipating. Sentiment among small business owners improved in May following four consecutive months of declines, according to the National Federation of Independent Business business optimism index. The index increased to 98.8 in May, up three points from the prior month and above the 51-year average of 98.
According to NFIB Chief Economist Bill Dunkelberg, “owners reported more positive expectations on business conditions and sales growth,” although “uncertainty is still high among small business owners.”
Consumer sentiment also showed signs of improvement, according to the University of Michigan’s preliminary reading of its June Index of Consumer Sentiment. The index improved to 60.5 from 52.2 in May, snapping a six-month streak of declining readings, as “consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,” according to Surveys of Consumers Director Joanne Hsu. Expectations for inflation in the year ahead plunged to 5.1 percent from 6.6 percent in the prior month. U.S. Treasury securities generated positive returns last week as yields declined in response to the week’s economic data releases, particularly the softer-than-expected CPI report on Wednesday, and a strong 10-year note auction on Wednesday. Perhaps counterintuitively, U.S. Treasury paper gave back some gains on Friday across the yield curve following Israel’s attack on Iran, with traders calculating that the surge in oil prices could push up overall inflation and make it harder for the Federal Reserve to cut interest rates.
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
The consumer price index rose 0.1 percent month-over-month and 2.4 percent annually in May, the Bureau of Labor Statistics reported Tuesday. The increase was slightly lower than April’s 0.2 percent increase and lower than the 0.2 percent increase economists expected in the wake of the Trump administration’s tariffs. Analysts have pointed to companies either pulling from existing inventory already in the U.S., absorbing tariff costs, or slowly adjusting their prices as possible explanations for the softer-than-expected increase.
U.S. producer price inflation remained muted in May across the board, another sign that tariffs have yet to result in higher prices for consumers and businesses. The producer price index rose 0.1 percent from a month earlier, according to a Bureau of Labor Statistics report released Thursday. The median forecast in a Bloomberg survey of economists called for a 0.2 percent increase. Excluding food and energy, the “core” PPI also increased 0.1 percent.
The World Bank projected slowed global growth in its Global Economic Prospects report released Tuesday, predicting that global GDP growth would slow to 2.3 percent, down from 2.8 percent last year. In January, it had projected a 2.7 percent growth rate in global GDP, but now says that economic turbulence created by American tariffs will slow economic output. The World Bank also projected that the U.S., which now has the highest effective tariff rate in a century, will have a 1.4 percent growth rate—a decrease of 1.4 percentage points from 2024.
President Trump announced on Wednesday that the U.S. had reached a “deal” with China after two days of trade negotiations in London. In a post on Truth Social, Mr. Trump said that China would relax its export restrictions on rare earth minerals and magnets, but The Wall Street Journal reported Wednesday that Beijing would place a six-month limit on rare earth licenses to U.S. companies. The U.S., in exchange, plans to drop its plans to cancel Chinese student visas along with restrictions on certain key exports. Tariffs would stay the same, sitting at 55 percent levies on Chinese goods and 10 percent on American products. It remains unclear whether the agreement will be finalized.
Consumer sentiment picked up in June, after recent dire readings, a new University of Michigan survey showed. A preliminary reading for June came in at 60.5. That was up from 52.2 in May, and higher than the 54.0 level forecast by economists polled by The Wall Street Journal. Consumers expect 5.1 percent inflation in the next 12 months, down from 6.6 percent in May.
The Yale Endowment is selling multiple stakes in private equity funds as the industry struggles and President Trump targets Ivy League institutions.
LinkedIn, X, Facebook, and other social media platforms are changing the business of wealth management, especially for younger advisors.Over 37 percent of financial advisors plan on retiring in the next decade, which account for 41.4 percent of the AUM managed by the industry. However, 26 percent say they are unsure of how they’re going to retire.
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.
- U.S. Persistence Scorecard, Year-End 2024 (SPIVA)
- Wealthy inheritors plan to fire their parents’ wealth advisors (Robert Frank)
- Scary Headlines Drive People to Claim Social Security Earlier (Alicia H. Munnell)
This is the best thing I’ve read recently. The most extraordinary. The most annoying. Churches in Hing Kong are preparing for a crackdown. “The average American is now vastly more affluent than the average European.” By bus. Dylan. RIP, Sly Stone. RIP, Brian Wilson.
Pizza has seen some of the most robust inflation within the restaurant industry, with the median pizza restaurant meal price increasing 12 percent from the end of 2023 to 2024. They are outpacing burger restaurants (7 percent), sandwich joints (5 percent cold, 9 percent hot) and Mexican (7 percent). The expansion of delivery services has been a problem for pizzerias, as their once relatively uncontested hegemony at the top of the takeout space is now threatened by every other restaurant in town. The restaurants that never bothered to form a robust delivery business have been “offered” one from the likes of Grubhub and Uber Eats, whether they want one or not. The average price of a large pizza at the top five chains is $18.14, up 30 percent from 2019.
“I’d rather be an optimist and be wrong than a pessimist and be right.”
~ Ole Gunnar Solskjær
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.
