From the desks of Stanley Katz & Lauren Madera
JULY 11TH AND JULY 12TH COMBINE FOR AN ANNUAL CELEBRATION OF SUGAR, FOOD DYE, AND NOSTALGIA. IF YESTERDAY’S NATIONAL SLURPEE DAY WASN’T ENOUGH, ENJOY TODAY’S NATIONAL EAT YOUR JELLO DAY!
Markets finished mixed for the week (DJIA: -0.50%, S&P 500: +1.23%, Nasdaq: +1.74%), as a late-week rebound in semiconductor and AI-related stocks helped push the tech-heavy indexes into the green despite a rocky few days. T. Rowe Price commented that early-week turbulence stemmed largely from renewed U.S.-Iran hostilities. A collapse of their ceasefire sent oil prices higher and revived inflation concerns across both equity and bond markets. Treasury yields rose in tandem, with the 10-year U.S. Treasury note climbing from 4.49% to approximately 4.56% by week’s end. Minutes from the Federal Reserve’s June meeting added further pressure, revealing that a few policymakers had considered raising rates and that most officials supported removing language that had implied an easing bias. Trading volumes remained relatively light coming off the holiday-shortened week, as investors braced for what shapes up to be a much busier stretch. On the horizon, we have second-quarter earnings season, inflation data, and the June retail sales report.
Even amid the week’s geopolitical noise, Capital Group is drawing attention to a quieter but equally significant development. In their new piece, the firm examines just how concentrated major equity benchmarks have become, a frequent phenomenon since big tech surged into the upper echelons of market caps. The 10 largest companies in the S&P 500 now represent nearly 40% of the index, a level not seen since the mid-1990s. Semiconductor-related companies alone are approaching one-fifth of the benchmark, and the picture is even more striking in emerging markets. Capital Group’s investment leadership used the piece to reflect on what this unusual moment means for investors and the responsibilities it carries. It’s a timely read for anyone thinking carefully about portfolio construction and the long-term implications of benchmark concentration.
If last week’s markets felt a bit “temperamental,” that may not be an accident. In a recent episode of Schwab’s “On Investing” podcast, Liz Ann Sonders and Collin Martin make the case that the “Great Moderation Era” has come to an end. That era, which ran roughly from 1995 through the early pandemic years, was marked by cheap and abundant goods, energy, and labor, alongside low inflation and unusually long economic expansions. In its place, they see a new “Temperamental Era” shaped by supply chain reshoring, retreating globalization, and persistent inflationary pressures. They anticipate more economic volatility, more frequent disruptions, and a bond market that reacts more to inflation signals than growth expectations. Treasury yields already appear to reflect this shift. The 10-year note remains elevated even as oil prices have partially retreated, and core Personal Consumption Expenditures (aka PCE, the Fed’s preferred inflation gauge) has exceeded the Fed’s 2% target for more than five years. The full episode is available at schwab.com/learn.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Capital Group:
Schwab:
Argus:
First Trust:
J.P. Morgan Asset Management:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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