Monday Market Review: July 14, 2025

Weekly Summary

In a strangely light week for economic news, jobless claims were mixed, while the FOMC minutes from the June meeting pointed to a continued ‘wait and see’ mindset around potential tariff inflation impacts and labor market conditions.

Equities were mixed globally, with the U.S. generally faring best. Bonds were lower as interest rates ticked up. Commodities were also mixed, with oil and gold higher, while other areas declined.

 What to know about the markets:

U.S. stocks started weaker and weren’t able to gain any ground through the week. Tariff news again dominated other news, in a week of few economic releases. By sector, energy and utilities led the way with gains, while losses were concentrated in financials, communications, and consumer staples. Real estate also lost a bit of ground for the week.

The July 8 deadline from the 90-day Apr. 8 ‘Liberation Day’ featured an extension until Aug. 1, which is not that far off. Treasury Secretary Bessent noted that countries will receive an extension if they continue to negotiate in good faith, and the government wants to see negotiations wrapped up by Labor Day. At the same time, the President announced several updated tariffs, including 25% on South Korea and Japan, as well as varying rates on Canada and several emerging nations. This included a proposed 50% tariff on copper, as well as 50% on Brazil, tied to legal proceedings there related to former President Bolsonaro.

The traditional start of the earnings season is this coming week, although a few companies have already reported, such as Delta Airlines, which was taken positively. Per FactSet, while Q1 growth was expected to be 7.2% as that quarter ended, it eventually ended at a robust 13.3%, being a similar tendency of upward revisions seen over the past few years. The expected year-over-year earnings growth rate for Q2 is 4.8%, which would be the slowest rate in a few quarters. Leadership is expected to originate again from communications and technology, showing double-digit growth, while energy stocks are bringing up the rear, with expectations of -25% (in keeping with oil price volatility). Also, consumer discretionary, materials, consumer staples, and industrials have early expectations of negative year-over-year growth, pointing to less overall breadth of positivity. However, some of this is expected to improve by Q3, with early expectations of 7.0-7.5% growth, although that remains a quarter away.

Foreign stocks were mixed, with small gains in Europe and the U.K. offset by a sharper drop in Japan, and moderate declines in emerging markets. U.S. trade uncertainty continued to drive sentiment globally, with little progress between the U.S. and Europe thus far in reaching an agreement, and new tariffs on Japan weighing even more negatively on sentiment.

Bonds also lost some ground last week as interest rates ticked higher, with U.S. Treasuries outperforming corporates slightly. Floating rate bank loans were the exception, with a small gain, as might be expected. International bonds all fell back along with a rise in the U.S. dollar.

Commodities were mixed by sector, with gains in precious metals and energy offset by sharper declines in industrial metals and agriculture. Much appeared to be in line with tariff uncertainty. Crude oil rose nearly 3% last week to $69/barrel, with early concerns over larger inventories offset by continued U.S. trade policy tension by the end of the week, which threaten demand..

 Our Weekly Economic Notes:

Notes key: (+) positive/encouraging development, (0) neutral/inconclusive/no net effect, (-) negative/discouraging development.

(0) Initial jobless claims for the Jul. 5 ending week fell by -5k to 227k, below the 235k median forecast. Continuing claims for the Jun. 28 week, on the other hand, rose by 10k to 1.965 mil., matching market expectations. By state, initial claims saw a rise in CA, MI, and TN, while NY saw an equivalent decline. Aside from seasonal effects, the regional dispersion is also tied to summer maintenance shut-downs in auto factories and similar activity on the manufacturing side. When seasonality adjustments are removed, the unadjusted data looks far more conventional, and similar to patterns of the past few years. Most importantly, there haven’t been signs of sharply higher claims, which would point to rising levels of layoffs and signs of labor market distress generally.

(0) The FOMC minutes from the June meeting were non-controversial, as usual, with comments such as that participants “generally agreed” that they were “well positioned to wait for more clarity on the outlook for inflation and economic activity.” At the same time, “most” participants noted the risk of tariffs having “more persistent effects” on inflation readings, while “some” felt those could negatively affect inflation expectations. So, the lack of clarity and unclear path on tariffs translating into price hikes has led to a split view among committee members. Insofar as labor was concerned, “a few” members noted that downside risks there had become their primary focus, as opposed to inflation. Insofar as interest rates were concerned, it appeared that “most” participants felt that “some” reductions “would likely be appropriate” this year, as was seen in the June SEP dot plot release. However, while some members felt a rate cut “soon” was best, others were biased toward “no reductions,” again putting the median of cuts later in the year the highest-probability course of action (as seen in the Fed funds futures odds, which point to one cut in Sept. and another in Dec.). This was in keeping with overall uncertainty lessening.

Have a good week.

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Sources: Ryan M. Long, CFA; Director of Investments; FocusPoint Solutions, Inc.

FocusPoint Solutions, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Citigroup, Deutsche Bank, FactSet, Financial Times, First Trust, Goldman Sachs, Invesco, JPMorgan Asset Management, Marketfield Asset Management, Morgan Stanley, MSCI, Morningstar, Northern Trust, PIMCO, Standard & Poor’s, StockCharts.com, The Conference Board, Thomson Reuters, T. Rowe Price, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wall Street Journal, The Washington Post. Index performance is shown as total return, which includes dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product. FocusPoint Solutions, Inc. is a registered investment advisor.