Over the last few weeks investors have put upward pressure on bond yields for a variety of reasons. First, the U.S. treasury lost its last AAA rating when Moody’s downgraded United States debt to AA.
Big, Beautiful Bond Yields
Data vs. Drama: The Real Economic Story
After a 20% rebound from its April 7 lows, the S&P 500 is positive for the year, marking one of the most significant short-term comebacks in market history. The market rallied on Monday following weekend news about tariff negotiations with China. In a complete reversal from the earlier “Liberation Day” tariff announcement, the punitive 145% tariff rate on Chinese goods was reduced to 30%, with a 90-day pause implemented. In response, China lowered its retaliatory tariff rate on U.S. goods from 125% to 10%.
A Break From Tariff Talk
This week, for the first time in months, tariff news was overshadowed by economic and earnings headlines. Those of us in the business of analyzing the market and economy can agree that this was a refreshing shift.
Investment Strategy Second Quarter 2025
While market volatility has been highly-elevated in recent weeks with the almost daily change in the proposed tariff landscape, in this quarter’s investment strategy video we endeavor to provide a measured perspective on what lies ahead and how navigate the psychology of investing.
Return of the Vigilantes
This week, equity market volatility continued due to last week’s announcement of global tariffs. Investors, attempting to handicap the potential impacts on the U.S. economy and corporate profits, caused a bond market rally by selling risky assets (stocks) and buying safe assets (government bonds). However, something changed over the weekend. The 10-year U.S. Treasury yield started the week at 3.9% and, by Tuesday evening, had reached 4.5%.
Pick Your Poison
Equity markets surged on Monday only to come under pressure to close the week at a 1.5% loss. Absent a rally greater than 4% on Monday, this will be the first quarter since the summer of 2023 when investors have lost money in domestic stocks.
Hold Your Fire
This week, the equity market had a “shoot first, ask questions later” response to news surrounding DeepSeek, a Chinese artificial intelligence startup company that claimed to achieve ChatGPT-level performance at a fraction of the cost. This news sent a shockwave through the technology sector, sparking a frenzy of speculation and questions about AI innovation.
Trees Don’t Grow to the Sky
When my family gathers around the holidays, we enjoy catching up on Jeopardy episodes with our two daughters. As they are both educators, it can be difficult for my wife and me to keep up, but it can also get pretty competitive. In one episode, I had the upper hand as the category was the “Magnificent Seven.” Luckily, this didn’t refer to the movies but to the seven stocks dominating the stock market. In investing circles, the term “Magnificent Seven,” or Mag-7, is well known, and I was surprised it had become recognizable enough to be a Jeopardy category. Unfortunately, while I was the first to “buzz in” and answer correctly in this category, I wasn’t as fortunate the rest of the game.
Reason or Excuse?
On Wednesday, in a widely expected move, the Federal Reserve cut the policy interest rate by 0.25% to a new range of 4.25% - 4.50%. This brings cumulative interest rate cuts to 1% for calendar year 2024.
The Hidden Strain Behind Economic Data
As I was getting my blood drawn yesterday, the phlebotomist learned that I worked in finance and asked my opinion on the economy. Focused on the sting from the needle, I quickly replied that things look fine and that we’re not expecting a recession in the near term.
Trick or Treat
Chocolate-loving parents may be in for a sour surprise as they rummage through their children’s Halloween candy this year. With cocoa prices double the levels seen last year, food companies are getting creative, reducing the size of chocolate bars and adding more non-chocolate treats to their Halloween candy bags for sale. Trick-or-treaters weren’t the only ones to experience an eventful week, as an action-packed capital markets provided investors with their own bag of surprises to unpack.
High Hurdle
As summer wraps up, the kids head back to school, and the weather becomes crisp, I can’t help but remember the ice storm that hit Portland earlier this year during one of the coldest weeks.
Setting the Stage
his week, Oregon residents experienced the first taste of fall. Evenings, once long and balmy, gave way to early, crisp sunsets. Leaves, damp from evening rain and morning dew, began dropping from trees. Pumpkins appeared on porches to greet the trick-or-treaters that would soon walk door-to-door. Lastly, capital markets demonstrated similar signs of change with company earnings announcements and macroeconomic data reports, ending a fairly quiet week by setting the stage for more significant releases of information in the coming weeks and months. Surely, fall is upon us.
Two Years Later
In October 2022, the S&P 500 hit a low of 3,577, which was 25% lower than at the start of the year. The Federal Reserve had just started an aggressive interest rate hiking cycle and 100% of Wall Street economists were calling for a recession by 2023. We believed otherwise.
Home Sweet Home Economics: Decoding the Fed's Impact on Housing
Recently, a realtor friend of mine shared that transaction volume was notably low due to high interest rates, resulting in a sluggish market. However, with last week’s Federal Reserve’s rates cut, he and likely others in the realty industry are hoping the housing market will be reenergized. While not everyone can buy or sell a house, home ownership is a prominent consideration when creating wealth. And while I’m not in the market to sell my house, I was curious about what is now occurring in the housing market.
Big Week for the Number 50
For sports enthusiasts and market participants alike, this week was all about the number 50. For fans of America’s favorite pastime, Dodgers star Shohei Ohtani became the first player in the history of professional baseball to record 50 home runs and 50 stolen bases in a single season. Ohtani achieved this historic accomplishment with a bang, going 6 for 6 with three home runs and 10 RBIs … in a single game.
What to Expect When You're Expecting (a Rate Cut)
“What to Expect When You’re Expecting” is a book for many first-time parents. My wife and I are preparing for our third child’s arrival in October, a process that has been a mix of excitement and logistical planning. While this is not our first rodeo, the passage of time has certainly brought a fresh set of challenges.
Tale of the 10-Year Treasury
A sense of excitement often marks the 4th of July as millions of Americans celebrate with a day full of festivities, reflection and national pride. This holiday kicks off July with a bang and sets the tone for a month filled with what we all enjoy – fun in the sun! Equities have taken center stage, the “bang” investors sought this year.
Hawks vs. Stocks
It was an action-packed week headlined by Wednesday’s economic “doubleheader.” The Federal Reserve’s June meeting took place the same day as the release of the Consumer Price Index (CPI) inflation report.
A Loosening Jobs Market
On Friday, stock and bond investors wrestled with conflicting conclusions from jobs reports. Two surveys report jobs data: the payroll survey and the household survey. The payroll survey showed a gain of 272,000 new jobs. However, the household survey showed a loss of jobs and an uptick in the unemployment rate to 4.0%.