S&P 500 Record Highs!!
The S&P 500 has conquered all doubters, breaking through the previous all-time high of 6,147 to finish last week at 6,173.
If you have doubted this rally, you are not alone. Tariffs,
Income taxes, and Iran together could not stop this market from moving higher. It is the old saying: markets love to climb a wall of worry.
Where do the markets travel from here? Higher, lower, or flattish of course are the options. The tax bill will likely become law before too long, erasing one uncertainty. The tariff situation could linger longer, and it appears the Iran situation is being viewed positively by many.
A short-term positive; technology is not the only sector moving our markets. According to the Wall Street Journal, Financials, Industrials, Utilities and Communication Services are outperforming technology year-to-date.
The lagging sectors of the S&P 500 are Energy, Consumer Discretionary, and Healthcare. All 3 are in the red for 2025.
Broad sector participation typically bodes well for the markets. Hopefully, the S&P 500 can hold at record highs and push higher.
The Federal Reserve Debate
The Fed is suggesting that the economy remains strong, employment is fine, and inflation has slowed. It now appears the Fed is abandoning its data-dependent stance and attempting to look forward. I wish he would have done so when he let inflation run hotter for longer and get out of hand. He did not move until the data reflected; he was absolutely incorrect in not raising rates quickly enough.
I believe Powell should sit tight. However, he should be looking closely at the consumer as retail sales have shown a few signs of slowing. As inflation comes down, one would expect consumer spending to accelerate.
Powell of course, must deal with President Trump calling him names and berating him in the media. The President should simply walk into Powell’s office and then he can say what he chooses. I would definitely replace Powell when his tenure expires next year. Too many poor decisions up until this point. Even if he gets it right this time, his mistakes have cost us far too much. Just remember, “I’m going to let inflation run hotter for longer” which followed his misstep in later 2018 saying rates need to go significantly higher causing a 4th quarter 2018 stock market correction. I do hope whomever President Trump picks for our next Federal Reserve Chairperson, will remain independent and not politically leaning.
As we close out the 1st half of 2025, let us remember where the year started, the issues that have mounted, and the amazing resilience the market has shown.
What a first half!! Hopefully the 2nd half will be filled with less drama.
Wishing everyone a relaxing and enjoyable 4th of July Holiday!!
All data sourced from Wall Street Journal, June 27, 2025.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested directly.
