Weekly Market Commentary - JUNE 30, 2025
Week In Review
Major U.S. equity indices continued to climb the proverbial wall of worry, with market sentiment torn
between enthusiasm and reservation, as the buoyancy of a nascent Israel-Iran ceasefire and confirmed U.S. and China trade pact “trumped” looming tariff deadlines and fiscal policy anxiety. U.S. equity market momentum found support from prospective harmony in the Middle East, easing concerns of oil supply disruptions and higher energy prices. Lower inflationary pressures were evident in the most recent economic data as well. The Personal Consumption Expenditures Price Index, the Fed’s preferred inflation measure, showed only a modest increase, with retail prices up 0.1% in May and 2.3% on an annual basis. The U.S.-China trade framework also benefited equity prices, providing a temporary reprieve from soaring tariffs and reinstating rare earth exports. However, the agreement does not provide a full resolution to the July and August tariff deadlines, setting up the equity markets for future volatility. The Senate voted to advance Trump’s “One Big Beautiful Bill” and while the extension of tax cuts and other pro-growth policies are a positive for market strength, the bill could add over $3.9 trillion to the national debt. 3 Present bias propelled the S&P 500 to a record high of 6,173, up +3.4%.
This Week
In a holiday-shortened week, the highlight will be the national employment numbers for the month of June. The consensus forecast is for nonfarm payrolls to increase by 115,000, with the unemployment rate edging up to 4.3%.4 Softness in the labor market could be the impetus for a rate cut.
Portfolio Theme
Despite the outperformance of international stocks over domestic stocks, the current -36.1% price-earnings discount is twice the 20-year average. 5 This suggests a possibility for superior price appreciation in international equities as valuations revert closer to their historical average. Simplicity offers model portfolios that may exploit shifting equity market leadership.
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Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes chart sourced from Capital Group.
1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums.
2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX). Past performance does not guarantee future results.
3 Congressional Budget Office.
4 MarketWatch.
5 JPMorgan.
Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication.
