June Market Outlook
| As we kick off June, markets are still trying to make sense of a complicated mix of trade policy changes, uncertain economic signals, and challenges in the bond market. Here are a few key things that have been going on recently and how they might affect investors: Trade Policy Is Shaky: A court decision on May 28 blocked most of President Trump’s tariffs, which added a layer of uncertainty. The government might still find ways to keep those tariffs in place, though. Tensions with China—especially over key mineral exports and Taiwan—are also flaring up again, reminding everyone that global politics can quickly shake things up. Good Earnings, But Watch Out: The first quarter earnings season was pretty strong—about 80% of companies beat Wall Street’s expectations. Big tech companies (the “Magnificent Seven”) were a huge part of that success, making up nearly half the S&P 500’s earnings growth. But even with these strong numbers, it’s unclear if that momentum will last through the second half of the year, especially with the economy looking a bit uncertain. Stock Prices Might Be a Bit Too Optimistic: Right now, markets seem to be brushing off the possible effects of tariffs, which makes the recent rally feel a little fragile. Stocks could still hit new highs this year, but that will likely depend on some positive surprises—like inflation staying in check or profits holding up. If the trade situation becomes clearer, investors might start focusing more on the tax bill being debated in Congress. Whether you like tariffs or not, the revenue they bring in could be key to extending the 2017 tax cuts. Bond Market Still Struggling: The bond market (especially Treasury bonds) is dealing with a lot—concerns about inflation, government spending, less interest from overseas buyers, higher yields abroad, and a U.S. economy that’s holding strong. All of this is pushing interest rates higher. Until the economic data starts to cool off, expect bond market ups and downs to continue. Looking ahead into the summer, keep an eye on inflation reports, trade talks, comments from central banks, and any movement on the tax bill. On the plus side, many companies are expected to get a boost from AI in the coming months and years. For long-term investors, it could be a smart move to look for chances to buy on market dips, though short-term volatility is likely to stick around until we get more clarity on trade. Meet Our Summer Intern: Nathan GuertlerPlease join us in welcoming Nathan Guertler to the FRS Advisors team! Nathan is a sophomore Finance major at Drexel University and a member of the Men’s Golf Team. Originally from Merchantville, New Jersey, Nathan will be interning with us through mid-September before returning to campus for the fall semester. We’re excited to have him on board and look forward to the contributions he’ll make this summer. |
 |