July delivered robust gains for the S&P 500, in keeping with strong seasonal trends typically seen during this part of the presidential cycle. Despite various macroeconomic and geopolitical concerns—including ongoing inflation, persistent tari discussions, and global political tensions—the broader market remained resilient, with strong earnings and positive fundamental momentum supporting continued new highs.
Notably, while the market’s performance has outpaced general investor sentiment, we see this as an important signal: many remain cautious and underinvested, and the gap between sentiment and results presents a meaningful long-term opportunity.
Earning season: The Q2 2025 earnings season is on to an impressive start, significantly boosting market
confidence. As of now, about one-third of S&P 500 companies have reported their results, and the numbers are strong: 80% have delivered earnings per share above analyst expectations—well above both the five-year and ten-year averages.
We are approaching the August 1 tarif deadline, but we don’t see it as a big event as a deal was already done with Europe and China has an extension to strike a deal.
The current uptrend in the S&P 500 remains intact. However, it will be important to monitor for any potential weakness over the next 3 to 6 weeks. While we have not reached that point yet, it is something to keep in mind.
As we head into August, we acknowledge that seasonally this period (August and September) tends to be
choppier, with increased volatility and a history of weaker returns relative to other months.
We anticipate that any pullbacks or consolidation phases in this period will likely be shallow rather than deep, providing tactical opportunities to buy on weakness. We do not see reasons for alarm should we encounter modest corrections or sideways trading.
Our view:
With many investors still insuficiently exposed to equities, we believe that future upside will be fueled as
sentiment catches up to actual market performance.
Our long-term outlook remains firmly positive. We continue to target 6,600–6,700 for the S&P 500 by the end of 2025, based on the ongoing strength in corporate earnings, leadership from the technology sector, and the likelihood of favorable monetary policy shifts later this year.
We remain confident in the enduring strength of US equities.
For investors aiming for consistent returns and exposure to world-leading businesses, US stocks remain a
fundamental component of any well-diversified portfolio. We see continued investment in US equities not as a risk, but as a strategic imperative aligned with capturing the very best of global innovation and economic progress.
