Typical July

August 2, 2025

July is historically the best month of the year for stock market performance and this year was true to form.  We came into the month with the S&P up nearly 30% in just 60 days so we wondered if there would be a pause in the buying.  Our concerns were unnecessary as excitement about the resurgence of artificial intelligence and optimism about the direction of the country pushed technology names to multiple new all-time highs.  Tariff tantrums continued to be a daily occurrence but despite all the noise trade deals that appear to be favorable to our economy were getting done.  If there is a fly in the ointment it would be the narrowness of the rally as technology-based indices soared while more broadly based indices did not.  It will be important to see the rally expand into other areas.  At the end of the month the S&P 500 had gained another 2.2% and is now 7.8% higher for the year and an amazing 31% off the April low. Oil prices rose 6%, the rate on the 10-year Treasury rose 3% and gold was unchanged.

The month began with the announcement of an important trade deal with Vietnam.  The week was a short week of trading due to the Independence Day holiday which included an early close on July 3^rd.  The market does tend to move higher ahead of a 3-day weekend, and the S&P 500 ended the week with a gain of 1.7%. The market began the first full week of trading with news Trump’s Big Beautiful Bill had passed but that was overshadowed by more tariff tantrums that continued for most of the week. At week’s end the S&P 500 had lost .3%.  At mid-month technology stocks took center stage after an Nvidia announcement of additional chip sales to China sent that stock to a new all-time high and other technology names came along for the ride.  The market plunged during the week on a rumor Trump was about to fire Jerome Powell but rebounded when he said he had no plans to do that.  The S&P 500 ended the week with a gain of .6%. The following week included an announcement of a large trade deal with Japan and reports a trade deal with the Eurozone was getting close.  Investors piled into stock as FOMO (fear of missing out) drove the S&P 500 to yet more new all-time highs before ending the week with a gain of 1.5%.  The market began the final week with the announcement of a trade deal with the Eurozone.   However, the market may have already discounted that deal as there was little reaction on Monday. During the week we also learned the economy grew at a better-than-expected annual rate of 3% in Q2 and consumer spending increased by 1.4%.  We closed the month with the Federal Reserve deciding to leave interest rates unchanged but when Powell said there are no current plans to cut rates in September the market turned lower.  Strong reports from Meta and Microsoft capped a good month for stocks.

August is historically an average month for the market with a gain of .6% and a higher close 57% of the time.  Many market metrics are indicating the market has gone too far too fast and we would not be surprised to see some profit taking.  The tech heavy NASDAQ has rallied more than 40% in less than 90 days and is trading with a price to earnings ratio 30% above the historic norm. One could argue that the incredible potential of artificial intelligence justifies the valuations, but a pullback is not only likely but would be healthy for the market. There are certainly many things to be excited about but there are also some uncertainties as to the actual economic impact of the numerous trade deals that have been reached.  At the end of the month traders are likely to focus on September, which is typically the worst month of the year for stocks.  We continue to be cautiously optimistic and will be adding to position on tradeable weakness.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.