June 22, 2025
Volume 12, Issue 25
Weekly Recap
The domestic equity indexes finished last week narrowly mixed, fluctuating throughout the week amid a slew of headlines regarding escalating tensions in the Middle East. These included a statement from President Donald Trump on Thursday noting a “substantial chance of negotiations” with Iran soon, which seemed to provide some relief for stocks on Friday morning. Smaller-cap indexes performed best for the week, followed by the Nasdaq Composite, which posted modest gains. The Dow Jones Industrial Average was relatively flat, while the S&P 500 finished modestly lower.
Following the conclusion of its June monetary policy meeting on Wednesday, the Federal Reserve announced that it would hold the target range for the federal funds rate at the current level of 4.25-to-4.5 percent, as was widely expected. This marked the fourth consecutive meeting at which the central bank has opted to leave its policy rate range unchanged. Speaking at a press conference after the meeting, Fed Chair Jerome Powell noted that “despite elevated uncertainty, the economy is in a solid position,” and the Fed remains “well positioned to respond in a timely way to potential economic developments.”
The Fed’s Summary of Economic Projections, also released Wednesday, showed that policymakers expect to make two interest rate cuts through the remainder of the year, unchanged from their previous projection. However, expectations for inflation and unemployment by the end of 2025 both rose, while projections for gross domestic product growth declined.
In a Friday morning interview with CNBC, Fed Governor Christopher Waller made comments suggesting the central bank could be able to cut rates as soon as July, which appeared to provide some support for stocks early in the day.
Other economic data releases during the week generally surprised to the downside, starting with the Census Bureau’s report of retail sales data for May. Tuesday’s report showed that retail sales fell for a second consecutive month, declining 0.9 percent after April’s drop of 0.1 percent. The slide was partially attributed to a steep decline in auto sales, which surged in March ahead of the Trump administration’s implementation of a 25 percent tariff on automobiles in early April. However, control group sales – which feed directly into the GDP calculation and exclude several volatile categories, including automobiles – rebounded from April’s modest decline, rising 0.4 percent in May, bolstered by increases in sporting goods and furniture purchases. Elsewhere, the National Association of Home Builders reported that its Housing Market Index reading, which gauges the overall sentiment of home builders, was 32 in June, down two points from May and the lowest reading since December 2022. Readings below 50 indicate that a majority of builders have a negative current and near-term outlook for the housing market. According to NAHB Chairman Buddy Hughes, “buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty.”
Meanwhile, a separate report from the Census Bureau and the Department of Housing and Urban Development showed that construction of new homes fell 9.8 percent to a seasonally adjusted annual rate of 1.26 million in May, the lowest level since May 2020. U.S. Treasury securities generated positive returns last week as yields across most maturities decreased in response to growing geopolitical concerns and the week’s economic data. Flight-to-quality was the primary theme, with the front end of the yield curve performing best..
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 Federal Open Market Committee voted unanimously on Wednesday to hold the benchmark federal funds rate in a range of 4.25-4.5 percent, as it has since the beginning of the year. They also released new economic forecasts — their first since President Trump unveiled a sweeping set of tariffs in April — showing they expect weaker growth, higher inflation and higher unemployment this year. Two things are of particular concern right now: incredibly uncertain trade policy and the geopolitical environment.
Israel’s war with Iran gave the dollar a boost after a long stretch of trouble. But the long-term prospects for the buck still don’t look good.
A generation ago, the federal budget was briefly in surplus. Now, it appears headed for a record stretch of peacetime deficits. Here’s what happened.
Young American college graduates are more likely to be unemployed than the average worker, and there are similar trends in Canada, Europe, and Japan. America’s “university wage premium”, which measures the difference between graduate earnings and those of everyone else, is falling. Relative job satisfaction is down, too.
The “revenge tax” will likely have consequences to investors.
REITs have underperformed. And, in related news, new listings haven’t been enough to jolt the housing market out of its slumber.
Tracking tariffs. Why long-bonds are falling out of favor.
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.
- Bad Advice (Morgan Housel)
- How to Avoid RMD Mistakes Around Roth Conversions (Bloink & Byrnes)
- More on Repealing the Laws of Economics (Howard Marks)
This is the best thing I’ve read recently. The most amazing. The most important. The most harrowing. A socialist might become mayor of New York City (what could go wrong?). Who really invented basketball? Buc-ee’s.
In 2024, the systemwide sales of Chick-fil-A hit $22 billion, one of only three chains in the U.S. to crack $20 billion: McDonald’s ($53.5 billion) and Starbucks ($30.4 billion). The thing is, Chick-fil-A pulled this feat off with just 3,109 stores compared to McDonald’s 13,559 locations. The average unit volume at a Chick-fil-A is $7.5 million, by far the highest among their peers, and it’s not close.
“You don’t need a weatherman to know which way the wind blows.”
~ Bob Dylan
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.
