From the desks of Stanley Katz & Lauren Madera
YOU’RE ONE IN A MELON. HAPPY WATERMELON DAY!
The three major U.S. stock market indices delivered sharp declines this week (DJIA: -2.92%, S&P 500: -2.36%, Nasdaq: -2.17%), marking a dramatic reversal and erasing much of July’s positive momentum. This selloff came despite continued strength in corporate earnings. Argus Research reports that the percentage of companies topping estimates sits in the mid-80% range, significantly above the long-term average of 75%. With about one-third of S&P 500 companies having reported Q2 results, blended earnings growth estimates have improved from initial low-single-digit expectations to a projected 6-8% growth rate—a meaningful upgrade that, under normal circumstances, would fuel market optimism. This week, however, ongoing friction between the Trump administration and Federal Reserve Chair Jerome Powell proved more influential than earnings beats.
Invesco’s analysis reveals the precarious nature of current market dynamics, where traditional economic relationships are being tested by unprecedented policy combinations. The firm notes that, while trade deals are providing some market support, the underlying mechanics of tariff implementation could actually complicate the Fed’s inflation-fighting efforts. Consider a scenario where monetary policy becomes less accommodative just as fiscal policy becomes more stimulative. It’s a bit like trying to drive with one foot on the gas and the other on the brake—you may still move forward, but the ride gets considerably bumpier.
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:
Invesco:
Capital Group:
American Century:
Schwab:
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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