Market Update 7/16/25

Mid-Year Update

We are halfway through the year, and the economic fallout from President Trump’s tariff policies has proved less dire than many expected. In fact, economists are now predicting strong job creation and cooler inflation in the future, contrary to expectations just a few months ago. Part of the shift in opinion is due to many tariffs being put on hold for negotiations. However, some tariffs have been implemented, and the real impact will become clear in the earnings reports starting this week.

Quarterly earnings began to roll out yesterday, with the big banks leading the charge. Major bank earnings are always notable because these institutions are deeply interconnected with the broader economy. We will be watching closely for signs of credit deterioration and increased loan loss provisions to assess whether the consumer is slowing. There were indications last quarter, particularly among low-cost retailers, that some consumers have started tightening their budgets. Earnings are one of the best sources of economic insight, and we’ll be paying close attention to the reports in the coming weeks.

As always, I appreciate your continued trust and confidence.