Weekly Market Commentary - JUNE 9 , 2025 

Week In Review

Notwithstanding the release of the Fed Beige Book mosaic that painted a picture of rising inflationary expectations and declining economic activity, the major U.S. equity indices continued their ascent as market sentiment was sustained by a resilient labor market and promising trade dialogue. The divergence between the “soft” regional economic depictions within the Fed’s Beige Book and the hard inflation and employment data of the past two weeks may be attributable to the latent impact of trade policy. Nonfarm payrolls rose 139,000 in May, beating the consensus forecast. Wage growth topped inflation and the unemployment rate stayed at 4.2%. On the heels of the most recent PCE Price Index that showed inflation was up just 2.1% from a year ago, economic fundamentals are hopeful. Unfortunately, current trade policy represents a dilemma for investors and the Fed in the form of possible tariff-related price increases. On that front, the financial markets welcomed a reprieve as the Trump administration agreed to meet Chinese officials in London for further trade negotiations. The S&P 500 rose +1.5% on the headlines and regained the 6,000 level.

This Week

The Consumer Price Index for the month of May will be released on Wednesday and may provide confirmation of subsiding retail inflation. With the S&P 500 back near record levels, the current valuation is rich by most financial measures. Trade discussions, tariff deadlines, and fiscal policy news may boost market volatility. Diversified portfolios have merit.

Portfolio Theme

Current trade and fiscal policies have increased inflationary expectations, and the term premium has increased to reflect the economic uncertainty. That has pushed the 10-year U.S Treasury real yield to 2.04% and presents an opportunity to secure an elevated coupon income, mitigate reinvestment risk and exploit an asymmetric payoff. Simplicity offers bond composites that may deliver superior relative returns versus holding cash.

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Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes chart sourced from Nuveen.

1 Style 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. 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.