Commentary for September, 2025

Hello all - we hope you had a nice September.

Stocks turned in yet another higher month. The Dow saw a gain of 1.9%, the S&P 500 rose 3.7%, and the Nasdaq, which has a higher concentration of tech stocks, added a solid 5.6%. 

 

Here’s a look at how the markets moved this month:

Here’s a look at the performance of the various sectors in the market:

Interestingly, the market continues to trade in the tight range we’ve seen the last several months.

Gold has been a big story, too, as it keeps climbing to new record highs.

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The markets are becoming more and more concentrated, with a few big names getting bigger and the rest of the market languishing.  

The five biggest stocks in the S&P 500 now make up nearly 30% of the index (Nvidia, Microsoft, Apple, Google, and Amazon).  Keep in mind, there are 495 other stocks in this index!

The ten biggest stocks are now 40% of the index!

While these big names are successful companies, it’s not healthy for a market to have such a high concentration of stocks.  Markets become more volatile and can fall sharply in these scenarios.

In fact, the market continues to rise while fewer and fewer stocks are doing well.  In a healthy scenario, markets rise and more stocks should be above their recent average.  That’s not the case today.  Below is a chart showing fewer stocks above their recent averages.  

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TRADERS ALMANAC

An interesting quirk in the markets is the time between the Jewish holidays of Rosh Hashana and Yom Kippur.  The trader’s almanac says to sell stocks on Rosh Hashana (this year on Sept. 22) and buy them on Yom Kippur (Oct. 2).  

Why?  

Like any of these trends, it’s hard to know exactly.  This year, though, we had options expiring just before Rosh Hashana, so selling may have happened after that.  This is also the end of the most volatile month and quarter, so that may play a part, too. 

As you can see in the chart below, selling on Rosh Hashana would have been an ideal time to do so.  Let’s see if October 2nd turns out to be a good time to buy!

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FED

The Fed held a policy meeting this month and announced a highly-anticipated rate cut for the first time this year.  He cited weakness in the job market as the reason for doing so. 

 

The market seems to be expecting more rate cuts this year, but we aren’t so certain.  A failure to announce more cuts is certain to see stocks fall on the news.
 

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INFLATION

Inflation data out this month showed inflation continuing to pick up. 

When we look at inflation on a month-to-month basis, prices continue to rise.

When excluding energy and food from the calculation (which economists call the “core” measurement), inflation rose steadily yet again.

Inflation at the business level has been very volatile lately.  At least this month there was a decline in prices, which may result in a lower CPI in the future.

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OTHER ECONOMIC DATA

Other economic data released this month showed a mixed picture.

The jobs picture looks terrible.  The number of new jobs has been trending lower and the last four months have seen very few jobs added. 

With a more granular look at the economy, both the manufacturing and service sides of our economy saw modest increases.

Retail sales moved higher again: 

Durable goods (these are items with a longer life, like a phone or refrigerator) also saw a slight increase.

Consumer confidence moved slightly lower.

However, small business owners are increasingly more optimistic. 

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Where does the market go from here?

October can be a volatile month for stocks, but its also historically a good month to buy as stocks rise into the end of the year.  Right now, stocks look to be a little expensive, but the trend has been steadily higher so we may keep climbing from here.  





This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.

Commentary for August, 2025

Hello all - we hope you had a nice August.

It was yet another month in the green for stocks. The Dow posted a gain of 4.0%, the S&P 500 added 2.0%, and the Nasdaq, which has a higher concentration of tech stocks, rose 3.0%. 

Here’s a look at how the markets moved this month:

Here’s a look at the performance of the various sectors in the market:

We saw a little more volatility at the beginning of the month, but that volatility subsided quickly.

The market continues to trade in the tight range we’ve seen the last several months.

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TARIFFS

It seems like a long time ago, but August opened with new tariff announcements from the Trump administration.  Some countries saw higher tariff rates while others saw lower rates.  

For the longest time, tariffs kept getting delayed and the market didn’t pay much attention.  The realization that the tariffs are here and are now implemented helped the market sell off strongly on the news. 

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NVIDIA

Earnings from Nvidia was a highly-anticipated event this month.  We don’t often talk about individual stocks, but Nvidia, whose chips are used in AI supercomputers, is the largest weighted stock in the market and it sets the tone for the direction of the market.

The company released earnings and while they still showed strong growth, they weren’t growing as fast as before.  Additionally, they anticipated slower growth ahead. 

The hype around AI has been a big driver in the markets recently, sending tech stocks in particular to record highs.   While the AI hype is still here, the excitement may be starting to cool down. 

As goes Nvidia, so goes the market.  The stock faded into the end of the month and the broader market tagged along, too.

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FED

Later in August, the market saw solid gains on news out of the Fed that rate cuts were likely in September.  

The Fed held their annual “Economic Symposium” in Jackson Hole, where they don’t implement any new policies at that time, but discuss the conditions and their outlook.  Fed chief Jay Powell cited the weakness in the jobs market as a reason for possibly lowering rates.  

It’s the most ‘dovish’ Jay Powell has been in a long time and the market saw it as a green light to go higher.

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EMPLOYMENT

The worry about the employment picture cited by Jay Powell was due to the economy adding only 73,000 jobs last month.  Additionally, the figures from the previous two months were revised sharply lower.

Adding to the volatility, President Trump weighed in citing manipulation by the bean counters and ordered the head of this division to be fired.

While the large and frequent revisions in these number do suggest something is wrong, declaring it manipulation and replacing the head of the department raises questions about quality of all economic data going forward.  This will only lead to more volatility in the future.  

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INFLATION

Inflation data out this month showed inflation may be getting warmer. 

When we look at inflation on a month-to-month basis, prices continue to rise.

When excluding energy and food from the calculation (which economists call the “core” measurement), inflation rose steadily yet again. 

Inflation at the business level showed a surprisingly high jump over the past month.  This inflation level tends to lead the CPI, and investors are worried that the tariff costs are starting to work their way into the system. 

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OTHER ECONOMIC DATA

Other economic data released this month showed an economy that continues to grow, though slightly.

With a more granular look at the economy, both the manufacturing and service sides of our economy saw modest declines.

Retail sales moved higher: 

Durable goods (these are items with a longer life, like a phone or refrigerator) also saw a slight increase.

Consumer confidence moved slightly lower.

However, small business owners were slightly more optimistic. 

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Where does the market go from here?

Stocks seem slightly overvalued here in the short run, but the trend has been steadily higher.  However, we are entering a historically volatile time of year, so caution is warranted. 

This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.

Commentary for July, 2025

Hello all - we hope you had a nice July.

This is beginning to sound repetitive - it was another nice month for stocks with very little volatility. The Dow actually saw a decline of 2.2%, but the S&P 500 rose 2.2%, and the Nasdaq, which has a higher concentration of tech stocks, gained 2.4%.

Here’s a look at how the markets moved this month:

Here’s a look at the performance of the various sectors:

The market is seeing less and less volatility.  Here’s the volatility index:

In this chart of the S&P 500, we can see just how little volatility there has been:

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TARIFFS

The tariffs didn’t have much impact on the markets this month.  Note that this commentary focuses on the month of July.  The tariff announcements on August 1 are consequential, but are not part of this commentary.

There were numerous headlines throughout the month where higher tariffs were imposed.  Or lower tariffs were imposed.  Or tariffs were postponed.  But with all the news, the lack of volatility shows how little impact they had on the markets.

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FED

The Fed held another policy meeting this month where they held rates steady yet again.  The lack of a cut was not a surprise for investors. 

 

Many investors seemed to believe the Fed would cut rates at least twice by the end of the year.   In his comments, Fed chief Powell poured cold water on any upcoming rate cuts, citing concerns with the tariffs.  This took investors by surprise and the market feel on these comments.  

Again, this commentary focuses on the month of July.  The economic data released on August 1 have increased the odds of a rate cut, but are not part of this commentary.

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INFLATION

Inflation data out this month showed inflation may be taking a turn higher. 

When we look at inflation on a month-to-month basis, prices continue to rise.

When excluding energy and food from the calculation (which economists call the “core” measurement), inflation rose steadily yet again.

Inflation at the business level continues to bounce around and was essentially flat this month.  This inflation level tends to lead the CPI, so hopefully we’ll see inflation slow down (or even move lower).

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OTHER ECONOMIC DATA

Other economic data released this month showed an economy that continues to chug along.

First, and most importantly, was the GDP report for the second quarter which shows the strength of our economy.  

All eyes were on this report after the slight decline in the previous report.  The results were solid, with the economy growing a healthy 3%.

While 3% was a solid number, under the surface it was a little “funky.”  Companies rushed to beat the tariffs by importing a lot of products before tariffs were imposed, which has skewed the recent figures.  The most recent report showed a modest gain in exports from the US, and a massive decline in imports. 

It may take a couple quarters for these figures to get back to “normal.”   

As for a more granular look at the economy, both the manufacturing and service sides of our economy saw modest gains.

Retail sales moved higher:

Durable goods (these are items with a longer life, like a phone or refrigerator) also saw a sharp drop.  However, when excluding the transportation sector which saw several large plane orders the previous month, durable goods sales were roughly flat.

Consumer confidence moved slightly higher.

However, small business owners were slightly less optimistic. 

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CORPORATE EARNINGS

A little more than half of the companies in the S&P 500 have reported their earnings and the results have been pretty decent.  The large tech companies, in particular, continue to see strength.

Earnings are on pace to grow over 6% and revenue (sales) stand at about 5%, so companies seem to be doing well.  

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Where does the market go from here?

We seem to be at very high levels in the markets here and wouldn’t be surprised to see markets pull back at some point.  However, markets continue to chug higher, and there hasn’t been a reason for investors to sell yet.

From a historical perspective, many indicators tell us stocks are expensive.  One indicator is the “Buffett Indicator”  which looks at the level of stocks compared to the strength of the economy.  This indicator has never been higher, which suggests stocks are overvalued.

The “smart money” (institutional investors) and “dumb money” (individual investors) are at opposite extremes, with the “smart money” very pessimistic.  This suggests the markets may be too high. 

However, companies continue to buy back their own stock at a record pace, which is a strong tailwind for stocks.

So while stocks may be high here, the market remains driven by activities out of Washington and that makes any predictions difficult.  




This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.