From the desks of Stanley Katz & Lauren Madera
SCHOOL’S OUT FOR SUMMER! — ALICE COOPER
The three major U.S. stock market indices posted modest gains this week (i.e., DJIA: +0.98%, S&P 500: +1.19%, Nasdaq: +0.99%), reflecting a more cautious tone following recent volatility. This measured advance comes as analysts grapple with what Argus Research calls “cutting forecasts in an unsettled environment.” The firm has reduced its S&P 500 earnings estimates for both 2025 and 2026, citing potential negative impacts from tariff policies and trade uncertainties. While first-quarter earnings exceeded expectations with roughly 14% growth, companies are struggling to finalize capital budgets amid shifting trade policies. Major retailers are taking divergent approaches—Walmart plans to pass tariff costs to customers while Home Depot will absorb them—highlighting the challenge of navigating an unpredictable policy landscape.
The disconnect between market sentiment and underlying economic fundamentals continues to puzzle analysts, as highlighted in recent commentary from Charles Schwab strategists. While “hard” economic data like GDP, employment figures, and retail sales remain relatively resilient, “soft” survey-based confidence measures have shown extreme weakness—at times even more compressed than during the global financial crisis. However, recent consumer confidence data suggests a potential convergence may be underway, with expectations showing their sharpest one-month improvement in four years. This divergence reflects broader market dynamics where credit spreads have remained surprisingly tight despite economic pessimism, suggesting investors remain confident in corporate America’s ability to weather policy uncertainties. The phenomenon feels reminiscent of late 1990s markets, where “buy the dip” mentality and retail trader influence helped sustain momentum despite underlying concerns about sustainability.
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.
Argus:
Schwab:
Fidelity:
American Century:
J.P. Morgan Asset Management:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
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