From the desks of Stanley Katz & Lauren Madera
WIDE OR NARROW, FLAT OR ARCHED — HONOR YOUR PRIMARY MODE OF TRANSPORTATION ON NATIONAL “I LOVE MY FEET” DAY!
The three major U.S. stock market indices delivered solid gains this week (i.e., DJIA: +1.74%, S&P 500: +0.94%, Nasdaq: +0.81%), driven by impressive second-quarter earnings results that continue to exceed expectations. Zacks Research reported that total S&P 500 earnings are up 12.0% from the same period last year. An exceptional 80.5% of companies beat EPS estimates—well above the 20-quarter average of 77.6%. The standout performance comes from technology companies. Tech earnings surged 18.3% year-over-year, including a remarkable 25.1% earnings growth from the “Magnificent 7” group. This robust corporate performance validates the market’s resilience despite mounting economic uncertainties and provides a fundamental foundation for continued optimism.
Beneath the surface of strong earnings lies a complex economic landscape shaped by tariff policies and monetary considerations. Northern Trust’s economists note that average effective tariff rates have skyrocketed from under 3% to 18.3%—levels not seen since the Great Depression. While businesses have absorbed much of the initial cost burden, evidence of price increases is emerging in sectors like furniture, apparel, and toys. The Federal Reserve faces an increasingly delicate balancing act between potential labor market deterioration and stubbornly elevated core inflation. Northern Trust is now calling for three consecutive 25 basis point cuts starting in September. Thus far, markets have navigated this challenging environment with surprising dexterity.
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.
Zacks:
Northern Trust:
Capital Group:
Invesco:
Fidelity:
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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