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7 Market Movers | January 30, 2026

Anne Harris — Fri, 30 Jan 2026 15:09:46 +0000

7 Market Movers | January 30, 2026 Anne Harris Fri, 01/30/2026 - 09:09

This week was dominated by monetary policy and Microsoft. Gary analyzes the Fed’s decision to keep interest rates steady for the first time since July. Microsoft had a difficult week, losing around $400 billion in market capitalization when their shares fell 12% after their latest earnings report. Watch the video below for the full analysis.

FULL TRANSCRIPT:

Hello, everyone. Welcome back to 7 Market Movers. My name is Gary Quinzel with Wealth Enhancement. The Fed held rates steady this week, which was widely expected, but the real story isn't about the decision itself. It's what changed beneath the surface. Today, I'm going to focus on three key investment takeaways from the Fed's January meeting and how our investment team is interpreting those shifts. The first and most important takeaway is that the Fed has clearly shifted from cutting to calibrating.

If you compare the statements from the last meeting to the most recent, the language tells the story. The Fed removed references to rising downside risks in the labor market and instead noted that unemployment has shown some signs of stabilization.

Chairman Powell reinforced in his press conference, emphasizing that after 175 basis points of rate cuts, the policy is now close to neutral and not meaningfully restrictive. We observed multiple sources sources of independent research, which broadly agrees with this sentiment.

The Fed believes that it's done most of the heavy lifting already and now wants to pause, reassess, and let the data guide the next move. This is no longer a race to the next cut. It's a wait and see environment.

The second takeaway centers on the labor market, and this is where opinions start to diverge. The labor market is going to be the swing variable at upcoming FOMC meetings. Chairman Powell acknowledged that job growth has slowed, but argued that labor demand and labor supply have cooled at the same time, leading to stabilization rather than outright deterioration.

Now, independent research providers agree, suggesting that the economy may be experiencing a jobless expansion or productivity gains support growth even as hiring slows. Yet others are more cautious. Some argue that the Fed may be declaring victory too soon, pointing to weaker private hiring, elevated uncertainty for small businesses, and borrowing costs that remain restrictive for parts of the economy. This disagreement matters because if labor conditions stabilize, the Fed can stay on hold. But if labor weakens again, rate cuts could return very quickly. For for investors, that makes labor data the single most important catalyst in the months ahead.

The third takeaway is all about growth, which will have a direct impact on what the Fed does next. The Fed upgraded its assessment of economic activities from moderate to solid. Now Chair Powell emphasized that resilient consumer spending, improving productivity, and ongoing investment tied to artificial intelligence and data centers all matter.

Now research again echoes this view noting that growth has remained stronger than expected even as the full impact of fiscal policy has felt. So strong growth is good news for the economy, but on the other hand, it also caps how dovish the Fed can be.

When growth is solid and inflation risks are better understood, there's less urgency to ease aggressively. That's going to shift market leadership away from Fed speculation and back towards earnings, cash flows, and fundamentals. So to sum up, the Fed is no longer cutting preemptively. The labor market is the key swing factor. Growth remains solid, and the markets are becoming more selective.

Now before we close, it's worth touching briefly on Thursday's significant move in Microsoft, which recently reported earnings. Shares fell roughly 12%, wiping out more than $400 billion in market value, which was one of the largest, actually the second largest, single day losses of market value in one day, after earnings showed that record AI spending but slower growth in its cloud business. This wasn't about Microsoft suddenly becoming an ineffective company. It was about expectations, valuation, and concentration.

When markets and portfolios are heavily concentrated in a small number of mega cap names, volatility can emerge quickly, even in high quality businesses. It's just yet another timely reminder that diversification isn't about filling up a style box, it's about managing risk when leadership becomes narrow. So please remember, in this environment, discipline, diversification, and fundamentals matter more than trying to time the next policy move or predict winners from the AI tailwind. Thanks for joining us. We'll see you next time on 7 Market Movers.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor's specific circumstances. Investing involves risk, including possible loss of principal. There is no guarantee that asset allocation or diversification will enhance overall returns, outperform a non-diversified portfolio, nor ensure a profit or protect against a loss.

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Gary Quinzel

7 Market Movers | January 9, 2026

Anne Harris — Fri, 09 Jan 2026 16:18:28 +0000

7 Market Movers | January 9, 2026 Anne Harris Fri, 01/09/2026 - 10:18

This week on 7 Market Movers, Gary Quinzel recaps the extraordinary market events of 2025, including the 3rd straight year of double-digit gains for US equities. He also takes stock of the first full week of 2026, including the recent rotation away from technology stocks into health care and the defense sector, and the small rally in oil stocks and gold after the news of the capture of Venezuelan President Nicolas Maduro.

Looking ahead to the rest of 2026, Gary covers the optimism around monetary policy and the potential impacts of the One Big Beautiful Bill Act on both businesses and consumers.

Watch the full video below!

TRANSCRIPT:

Hello, everyone. Welcome to the first 7Market Movers of 2026. My name is Gary Quinzel, Vice President of Portfolio Consulting here at Wealth Enhancement. Before we dive into today's Market Movers, I want to do a quick recap of 2025 because it really was an extraordinary year any way you look at it.

Starting first with US equities, it's hard to believe after the start that we had that US equities, as demonstrated by the S&P 500, would gain 18% for the year, which was its 3rd straight year of double digit returns. This past year, most of the return was actually driven by earnings expansion, so not multiple expansion as it had been in previous years. The same cannot be said if we look overseas at international stocks, which, notably outperformed the US. So if we look at the the IFA, the MSCI developed international index gained around 31%.

The emerging markets index gained around 33.5%. A lot of that, was driven by multiple expansions. So investors are feeling better, about investing overseas, and of course, the softer dollar to start the year also played a contributing factor. We're starting to notice investors feeling more optimistic about investing overseas, and a big part of that is probably because of the concentration that we are experiencing here in the US with the mega cap tech leaders.

If we look around the investment universe, it wasn't just stocks that did very, very well. Bonds did very well too as we saw interest rates generally come in. We saw the Bloomberg Aggregate Index gain around 7.5%. We saw, even Munis had a good year after a rough start gaining around 4.5%.

High yield did well. And most notably, gold, if you think about, safe haven assets, gained around 65%.

A lot of that driven by geopolitical uncertainties, and, of course, there's also a lot of central bank purchases of of gold. And so we continue to see that, ride a wave of popularity. Does feel like it's getting a little overbought, but it's a very hard thing to gauge from a time perspective. So if we take a look at what's happening right now, today's news is really focused on the Supreme Court ruling that's going to rule on whether or not the president Trump's liberation day tariffs were legal or not.

So all eyes are on that. We could see a rule ruling as soon as Friday, January 5th. Regardless of the outcome, I think just knowing where we stand is going to be beneficial, removing that layer of uncertainty. But I think more importantly, if we do see some of those tariffs ruled ruled against if if the ruling is against the tariffs, that could definitely benefit certain companies, especially those companies that do a lot of reporting. They could certainly improve margins, lower cost to consumers.

So if you're looking at sectors like staples, discretionary, industrial, certainly could see a larger impact. And we've noted that almost 1,000 companies have already lined up to potentially sue to recoup some of those losses over billions of dollars that have been levied so far in duties so far. So we'll certainly be paying attention to that. As we look at the markets in the early days of 2026, we've seen a little bit of a rotation.

I touched upon this. We're seeing more broader enthusiasm for for stocks and for the economy, but we're seeing a little bit of a rotation early on away from technology towards things like health care, towards defense stocks. We're seeing Russell 2000 small caps perform really well, and so value is outperforming growth. And notably, EM is still continuing to outperform all geographic sectors on the hopes of higher, underlying growth and, again, valuation expansion because overall valuations continue to be more attractive as a lower starting point.

So we're seeing some of that rotation, a lot of optimism around things like monetary policy. Here in the US, it is still slightly accommodative. Now we did, of course, have 3 rate cuts last year. We're not expecting that again this year, but one to two cuts is certainly possible.

If you look at the Fed futures market right now, nothing is expected in the first meeting in January. But, following that in March up to June, we could see 1 to 2 cuts. Of course, it is isn't always will be data dependent. Depends on what happens with the labor market.

Will it continue to soften? Will we have softer GDP prints, softer overall, growth numbers? That'll certainly support the case, for more cuts so that the Fed as always will remain data dependent. And if you look at the dot plot, which actually shows where the FOMC participants anticipate rates going, they're pricing in one more rate cut next or this year, I should say.

So we'll certainly pay attention to that as it helps the markets out.

Maybe more importantly, right now, as we're getting closer to as we've turned the page onto 2026 fiscal policy, because we expect that to be very accommodating here in this year, and that's because of the One Big Beautiful Bill Act, which could boost growth by some estimates up to half a percentage point. The reason for that is is because it is overall going to lock in a pro growth tax policy for the foreseeable future, which again removes a level of uncertainty that was there before. It also is going to continue to incentivize businesses to invest in their do capital spend invest in their business, do capital expenditures, and that tends to lead to productivity enhancement.

And on the other side, the flip side, the lower effective tax rates for for for taxpayers means more money in your pockets, more money for households to pay on consumer goods. So all of that lends itself to a a happier consumer and and more positive investor sentiment, which if you look at many measures, it is modestly positive. If look at AAII investor sentiment, it's still above its long term average. It has softened a little bit recently, which is kind of a good thing.

Right? You don't necessarily want to be at extreme levels that can tend to be a little bit contrarian as oftentimes that precludes a sell off. But, right now, it's kind of in that Goldilocks territory. And so, we're looking at that.

We're also looking at volatility, which is actually very, very low right now, which can suggest some level of complacency. We've seen this before, as, you know, volatility goes away, and it can often foreshadow unexpected bouts of volatility. So we will certainly, pay attention to that as well.

Last thing before we wrap up here, I just wanna touch upon the US military action that captured Venezuelan president Nicolas Maduro recently. As we often talk about geopolitical events, even the ones that are very, very significant as this one, this is probably the most significant one in Latin America in several decades, tend not to move the markets that much, at least out of the gate. And so this is this year's or this instance is no different. We've seen some reaction most notably in certain oil stocks.

They are they rallied a little bit. We've seen gold rally a little bit, and some defense stocks have done well in addition, but we're not seeing a major impact to the overall market. I think what's gonna be more interesting on the longer run is what happens. Are we gonna see political stability return to the region?

Are we going to see the new leadership come in and boost the output of Venezuela? Because right now, productivity is actually extremely low even though they have the world's largest reserves, so certainly, Hawaii's will be on that. So like anything else, we will continue to monitor this and all the other factors that move the markets.

We hope you found this insight, today's updates insightful as always.

And if you have any questions about this and what's moving the markets today, tomorrow, or into the future, please reach out to us or your financial adviser. And we hope you have a great day and a great week. Take care.

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Gary Quinzel

Year-End 2025 Market Commentary

Tom Bidinger — Fri, 09 Jan 2026 14:47:35 +0000

Year-End 2025 Market Commentary Tom Bidinger Fri, 01/09/2026 - 08:47

For the period December 1 – December 31, 2025.

Executive Summary

U.S. equity markets ended 2025 with their third year of double-digit gains overall, bringing the S&P 500’s total annual gain to 18%. It was a strong year across nearly every sector, and, whether concentrated or diversified, investors generally ended the year in the green. Despite broader contribution from stocks beyond the “Magnificent Seven”, AI has remained a primary theme in markets and valuations.

We also saw meaningful shifts in monetary policy to stem a weakening labor market, with the Federal Reserve trimming interest rates a third time in December, bringing the target Federal Funds Rate to 3.50-3.75%. At the same time, we experienced a temporary data blackout following the longest government shutdown in history. The delayed economic numbers, once released, showed the highest unemployment rate in four years (4.6%), largely attributable to Federal labor force cuts—stoking some economic growth concerns.

Still, if the year had a word, it was resilience. Consumption had a banner year despite sticky inflation and the impact of higher tariffs. Treasury yields came down in anticipation of further rate cuts in 2026. And while the Supreme Court ruling on tariffs remains a closely watched unknown, economic growth should remain stable in 2026, due in part to tax refunds from the One Big Beautiful Bill Act, which are set to hit wallets by spring.

What Piqued Our Interest

AI Bubble Concerns Held a Steady Drumbeat

There’s still plenty of debate surrounding the elevated equity valuations of Mega Cap Tech companies, with 28% year-over-year (YoY) earnings growth versus 12% for the broader S&P 500. Forward P/E multiples for Tech-heavy indices sit well above the broader market, and concentration remains an issue. But while bubble concerns haven’t abated, current Tech valuations are nowhere near the sky-high valuations we saw during the dotcom bubble of the late 1990s. Investors today are more focused on tangible, near-term earnings over speculative, long-term potential, and companies like Nvidia, Microsoft, and Alphabet (Google’s parent company) are some of the most profitable in history—and growing—with strong operational cash flows and balance sheets.

There is some concern that earnings may not ramp up fast enough to justify the hundreds of billions in AI infrastructure spending, particularly since top names carry a premium, which assumes flawless execution on AI. So, if Tech is indeed facing a bubble, the timing and effects of its burst will depend on the degree to which its leaders can deliver the AI productivity gains they’ve been promising.

The K-Shaped Divide Persisted

Consumers propelled the strongest economic growth that the U.S. has seen in the last couple of years. But the strength of the consumer continues to be bifurcated, with strong household spending among the wealthiest individuals, while middle- and lower-income households remain stretched thin, searching for discounts and bargains. With 67% of the U.S. wealth distribution sitting among the top 10% of earners, the affordability standard continues to be deeply polarized, causing the market’s attention to begin leaning away from inflation and towards the labor market. From a sector standpoint, Healthcare and Government demonstrated some gains in hiring. But Manufacturing, Retail, and Transportation—all sectors that are statistically the hardest hit among the bottom portion of the “K”—are still struggling. Moving forward, tax stimulus and further easing of inflation pressures would help all consumers to some degree.

Market Recap

Global Equities Boasted a Banner Year

Large Cap Growth stocks drove U.S. earnings throughout the year, with the Information Technology sector easily leading the charge with earnings growth of 28% YoY. But it wasn’t just Tech. We saw compelling numbers across nearly every S&P 500 sector in 2025. Communication Services was close behind (up 19%), followed by Healthcare (up 13%), Industrials (up 9%), and Consumer Discretionary (up 7%). Energy Industry, the smallest portion of the index, was the only sector that fared poorly (down 11%). But it was in the Materials sector that we saw one of the most noteworthy gains. Gold was up a remarkable 65%—its biggest one-year gain since 1979—setting the tone for Commodities.

Even with the strength in U.S. equities, it was international equities that stole the spotlight in 2025, with notable earnings growth contributions and attractive valuations staging a striking comeback. The MSCI Emerging Markets Index posted a year-to-date (YTD) gain of 33.6% in 2025, marking its best annual performance since 2017. On the developed markets front, the MSCI All Country World ex USA Index outpaced the S&P 500 in 2025 after several years of underperformance, with a total YTD gain of 32.4%. In both cases, the outperformance was driven by a combination of favorable market dynamics, global monetary easing, and a weaker U.S. dollar.

Fixed Income Found Rooted Resilience

The bond market finished the year strong. Investment grade credit spreads edged near historic tights on the back of strong corporate balance sheets, and securitized credit continued to outperform. As interest rates moved lower, so did the short end of the yield curve, while the long end remained sticky. Importantly, inflation, economic growth expectations, and the outlook on fiscal policy dictate the direction of the long end.

The 10-year Treasury yield moved nominally higher in December, up to 4.18% at year-end. The Bloomberg US Aggregate Bond Index was up 7.30% for the year, and the Bloomberg US Corporate High Yield Total Return Index performed similarly, closing the year up 8.62%. With some exceptions, municipal bond valuations remained attractive.

Wealth Enhancement Perspective

As we close out 2025 and shift into the new year, we continue to monitor the path of monetary policy, the Supreme Court’s decision on tariffs, labor market softness, and consumer durability. Perhaps most importantly, we are cognizant of concerns around an AI bubble, the timing of AI productivity payback, as well as the crowded bullish consensus on the sell side.

We expect earnings growth to maintain its steady footing throughout 2026, based on a variety of factors: A possible reversal of tariff headwinds, significant fiscal stimulus, lower interest rates, a potential bounce-back of the middle-class consumer, and AI—assuming further productivity gains are realized.

From a portfolio construction perspective, the low correlation between stocks and bonds is returning to historical norms, meaning a diversified stock/bond portfolio is coming back, creating a very favorable dynamic from a risk standpoint. For long-term investors, this is a good opportunity to rebalance, diversify, and focus on fundamentals.

This information is not intended as a recommendation. The opinions are subject to change at any time, and no forecasts can be guaranteed. Investment decisions should always be made based on an investor's specific circumstances.

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December 2025 Market Commentary

Tom Bidinger — Thu, 04 Dec 2025 15:20:32 +0000

December 2025 Market Commentary Tom Bidinger Thu, 12/04/2025 - 09:20

For the period November 1 – November 30, 2025.

Executive Summary

Markets oscillated in November as investors debated two issues: The likelihood of a December Fed rate cut and the current state of the AI revolution. Although market volatility was heightened during the month, November was a time of digestion rather than disruption.

What Piqued our Interest

The Government Restarts

The longest government shutdown on record, lasting 43 days, came to an end on November 13. Despite the reopening, not everything is back to normal, especially when it comes to economic data releases. During the shutdown, releases were either canceled or delayed, and, importantly, no new statistics on prices or jobs were collected, leaving policymakers and investors with a data gap. Some alternative data has been used to fill the gaps, but official government data will still carry weight when released. While there continues to be debate over how much the shutdown impacted the economy, the stock market mostly shrugged it off.

The K-Shaped Economy and Fed Policy

Views on spending, affordability, and economic growth vary depending on who you ask and what data you look at. The varying growth rates resemble the letter K, where some segments are seeing growth while others are seeing slowing. Recent data from the Fed’s Beige Book, a report that gathers anecdotal evidence on current economic conditions, showed that higher income spending was strong but lower and middle-income households were seeking more discounts and promotions. We see bifurcation from a sector standpoint as well, where spending remains robust by companies in the Technology sector, especially those that are tied to AI. On the other hand, other sectors such as manufacturing, residential construction, and trucking are struggling and pulling back on hiring.

The Fed will meet for its final meeting of 2025 on December 10 and markets are expecting another 0.25% cut, which would bring the target Fed Funds rate to 3.50-3.75%. As usual, investors will be focused on the forward guidance and accompanying commentary more so than the rate cut itself. If inflation risks are expected to linger, markets may need to digest and recalibrate the pace of expected cuts in 2026.

The AI Debate

The debate surrounding whether we are in an AI bubble raged on during the month, especially as investors wrestled with lofty valuations and a slight shift in how the build-out for AI would be financed. Thus far, Mega Cap Tech companies with great balance sheets and strong operating cash flows have been doing the heavy lifting, but the last few months have introduced some incremental debt issuance that brought back fears of a dotcom era bust. For many Technology companies, the risk is spending too little, falling behind, and missing out on the next big shift in computing.

For investors, the risk is that the companies they have invested in have poor returns on this invested capital. It is a concern because the future monetization of AI is not yet concrete and competitive dynamics for many AI models and platforms can shift rapidly. In November, the markets paused and digested the new narrative, but most investors remain cautiously optimistic.

Market Recap

Equities Oscillate

Volatility was elevated during November, but the S&P 500 Index saw a late recovery heading into the Thanksgiving holiday. Growth stocks, heavily concentrated in the Tech sector, weighed on returns. The Technology sector in the S&P 500 Index declined -4.3%, and the Growth-oriented Nasdaq 100 Index declined -1.5% for the month. U.S. Large Cap Value stocks outperformed during the month, up 2.7%, but are still behind Growth stocks on a year-to-date basis.

U.S. stocks grab a lot of attention, but this year ex-U.S. returns are outperforming. Emerging Market stocks pulled back by -2.4% during the month, but the MSCI Emerging Markets Index is up close to 30% for the year. Developed International stocks aren’t far behind, posting a positive 0.6% return in November and taking the year-to-date return to 27.4%.

Fixed Income Markets Remain Stable

Lack of economic data, numerous Fed governor speeches, and speculation surrounding who the next Fed chair would be kept the bond market active, but returns were steady in fixed income during the month of November. The 10-year Treasury yield declined, ending the month with yields near 4.0%. The Bloomberg U.S. Aggregate Bond Index rose 0.6%, while the high-yield index posted similar gains. In municipals, there is anticipation that new issue supply will be short of demand, providing a tailwind into December, where returns have historically been positive, averaging returns of 0.54%.

Wealth Enhancement Perspective

November reminded us that narratives can change quickly. Concerns over AI and Technology stock valuations, alongside cautious Federal Reserve governor speeches, gave way to renewed excitement around improved AI models and growing confidence in a December rate cut. While fundamentals remain constructive, sentiment shifts can occur and impact short-term returns.

For long-term investors, this is a time to stay disciplined, diversified, and opportunistic. Portfolio maintenance may not be high on a Holiday to-do list, but it can be a time to rebalance portfolios that may have drifted away from initial allocations, tax-loss harvest to offset gains, and selectively deploy cash to assets that can help you reach your objectives.

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November 2025 Market Commentary

Tom Bidinger — Wed, 05 Nov 2025 17:04:39 +0000

November 2025 Market Commentary Tom Bidinger Wed, 11/05/2025 - 11:04

For the period October 1 – October 31, 2025.

Executive Summary

Equity markets extended their rally in October, once again closing out the month near record highs. The Fed’s second rate cut of the year helped reinforce optimism across risk assets, even as policymakers signaled a more measured approach ahead.

What Piqued Our Interest

Global equities continued their climb in October, once again led by Large Cap Growth stocks—particularly the “Magnificent Seven,” which remain the primary beneficiaries of the ongoing artificial intelligence (AI) tailwind.

AI continues to be one of the most powerful forces driving both corporate spending and investor enthusiasm. Recent estimates suggest that AI-related capital expenditures accounted for more than 90% of U.S. GDP growth in the first half of 2025, with “hyper-scaler” investment projected to exceed $1.4 trillion between 2025 and 2027.

At the same time, some analysts have expressed concern over “circularity” in this spending cycle—where technology firms, suppliers, and financiers are increasingly reliant on each other’s capital to sustain growth. This dynamic has raised questions about profitability, returns on investment, and the long-term durability of AI-driven business models, especially as infrastructure spending outpaces realized revenue.

We continue to view AI as a long-term productivity catalyst, with the potential to lift U.S. labor productivity by as much as 15%. However, we remain mindful that concentrated capital flows and lofty expectations can create vulnerabilities if liquidity tightens or earnings growth slows.

The Fed Cuts Rates—Again

The Federal Reserve reduced the federal funds rate by 25 basis points in October, marking its second cut of the year. Policymakers cited softer labor data and further progress on disinflation, with headline CPI at 2.9% and core PCE near 2.8%.

The decision was largely expected and reinforced the view that the Fed may be nearing a “soft landing.” Lower borrowing costs supported both equities and fixed income, with the Bloomberg U.S. Aggregate Bond Index gaining 0.62% for the month. Fed Chair Jerome Powell emphasized that future policy moves will remain data-dependent, suggesting a cautious pace of easing until inflation settles closer to target.

Market Recap

October was another strong month for equities. Despite a brief mid-month pullback, the S&P 500 rose 2.34%, the Dow gained 2.59%, and the Nasdaq 100 surged 4.81%, extending its year-to-date gain to nearly 24%. Large Cap Growth stocks remained the primary drivers of performance, while Small Caps and Value-oriented sectors saw more modest gains.

International markets also posted solid returns, with the MSCI ACWI ex-US up 2.02%, and emerging markets outperforming developed peers. The MSCI EM Index climbed 4.18% and is now up more than 32% year-to-date, buoyed by currency strength and improving liquidity conditions abroad.

Wealth Enhancement Perspective

Markets continue to balance optimism around monetary easing with recognition of structural risks. The Fed’s pivot toward rate cuts provides a supportive backdrop for asset prices, but it also reflects a slower underlying economy. This comes as the government shutdown is now the longest on record, impacting everything from food stamps, economic data releases, air traffic controllers, and much more. Fiscal uncertainty, tariffs, and geopolitical tensions remain unresolved, all of which may influence market dynamics in the months ahead.

Valuations are difficult to ignore. The S&P 500 now trades at roughly 23 times forward earnings, well above its five-year average of 20, while the Nasdaq 100 commands a multiple near 28, signaling elevated expectations. While valuations are a poor predictor of short-term performance, they can temper long-term return potential if earnings growth moderates.

For investors, discipline and diversification remain essential. As we approach year-end, maintaining balance between risk assets, quality fixed income, and other diversifying assets—while avoiding overconcentration in any one sector or theme—will be critical to navigating the next stage of the market cycle and positioning portfolios for long-term success.

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7 Market Movers | October 31, 2025

Tom Bidinger — Fri, 31 Oct 2025 12:54:09 +0000

7 Market Movers | October 31, 2025 Tom Bidinger Fri, 10/31/2025 - 07:54

This week on 7 Market Movers, Wealth Enhancement Deputy Chief Investment Officer Doug Huber discusses the latest economic and market headlines. Topics include the Fed surprising us all with a second interest rate cut despite ambiguous signals and the ongoing government shutdown, strong corporate earnings, and equity markets remaining broadly positive.

Please contact our office if you have any questions you’d like to discuss.

There is no guarantee that asset allocation or diversification will enhance overall returns, outperform a non-diversified portfolio, nor ensure a profit or protect against a loss. Investing involves risk, including possible loss of principal.

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7 Market Movers | October 10, 2025

Tom Bidinger — Fri, 10 Oct 2025 13:50:09 +0000

7 Market Movers | October 10, 2025 Tom Bidinger Fri, 10/10/2025 - 08:50

This week on 7 Market Movers, Wealth Enhancement Portfolio Consulting Director Aya Yoshioka discusses the latest economic and investment market developments. Topics include the rise in global equity markets despite the ongoing U.S. government shutdown, third-quarter earnings season opening strong but expected to slow, and the Fed initiating the first interest rate cut of 2025 amid softening labor markets.

Please reach out to an advisor if you have any questions you’d like to discuss.

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October 2025 Market Commentary

Tom Bidinger — Wed, 08 Oct 2025 20:13:03 +0000

October 2025 Market Commentary Tom Bidinger Wed, 10/08/2025 - 15:13

For the period September 1 – September 30, 2025.

Executive Summary

Markets defied historical seasonality in September. Major U.S. equity indices posted their strongest September gains in over a decade, fueled by optimism around artificial intelligence, resilient corporate earnings, and an interest rate cut from the Fed. However, political uncertainty from a U.S. government shutdown and delayed economic data releases add complexity to the outlook.

What Piqued our Interest

Labor Market Weakness

Last month, we continued to receive data that corroborates softness in the labor market. The monthly nonfarm payrolls report for August came in at just 22,000 versus expectations of 75,000. We also saw the Bureau of Labor Statistic’s annual revisions to employment data through their quarterly census of Employment and Wages (QCEW) report, which showed that payrolls from April 2024 through March 2025 were actually 911,000 lower than initially reported, a revision that was the largest in the last 10 years. Additionally, job openings have fallen below the number of unemployed for the first time since 2021. The unemployment rate remains at 4.3%, but underemployment and discouraged worker metrics have been rising.

With the government shutdown delaying official data from the Bureau of Labor Statistics (BLS), we may not be receiving official data in a timely manner. The Fed will need to rely on alternative indicators, such as data from private payroll providers, especially if the shutdown lasts longer than anticipated.

Fed Cut Fuels Optimism, But Risks Remain

Given the weakness seen in the labor market, markets began to anticipate a rate cut, especially after Jerome Powell’s speech at Jackson Hole in August. On cue, the Federal Reserve delivered their first rate cut of 2025 at their meeting on September 17, citing they are seeing “much more challenging economic times,” as inflation remains elevated.

Despite the softening labor market, consumer strength has persisted. Second quarter GDP growth was revised higher to 3.8%, and core personal consumption expenditure (PCE) held steady at 2.9%. Retailers also reported resilient demand, and discretionary spending forecasts for 2026 were revised higher by several companies at investor conferences during the month. With economic growth still positive, markets cheered the rate cut, as lower interest rates without a recessionary backdrop are supportive of risk assets. However, if growth accelerates too quickly, rate cut expectations could unwind and create headwinds for this relentless rally in markets.

Market Recap

Equities Rally Fueled by Technology

September bucked historical trends and delivered solid returns, with the S&P 500 rising 3.7%, the Nasdaq surging 5.5%, and the Dow Industrials Average adding 2.0%. Small Caps joined the rally, with the Russell 2000 Index advancing 3.1% and hitting its first record high since 2021.

Technology stocks continued higher in September, gaining 7.3% during the month, supported by the continued enthusiasm for artificial intelligence. Several large technology companies announced forecasts for out-sized demand related to cloud computing and semiconductors.

Tech-related gains were not confined to the U.S., as global demand for semiconductors and the global buildout of AI infrastructure helped shift sentiment in markets such as China, Taiwan, and South Korea. This helped fuel the 7.2% gain in Emerging Market stocks in September, bringing year-to-date gains to 27.5%.

Fixed Income Markets Remain Stable

The 10-year Treasury yield declined in September, ending the month with yields near 4.1%, down from the January high of 4.8%. The Bloomberg U.S. Aggregate Bond Index rose 1.1%, while the high-yield index posted modest gains. Municipal bonds have lagged within Fixed income on a year-to-date basis, but they were up 2.3% in September, their best monthly return in 2025.

Wealth Enhancement Perspective

September’s performance was a reminder that markets can sustain momentum, especially when supported by mixed-yet-resilient fundamentals and dovish policy. The AI narrative continues to evolve, expanding beyond Mega Cap names into infrastructure and supply chain beneficiaries, both in the U.S. and abroad.

Despite this backdrop, we are mindful that valuations are elevated, and concentration risk persists. We also note that more accommodative monetary policy—at a time when the economy is performing—could pose upward pressure on inflation. Additionally, if economic growth accelerates too quickly from here and expectations for further rate cuts get priced out, sentiment could sour and dent market enthusiasm.

For long-term investors, this is a time to stay diversified and opportunistic. Rebalancing, tax-loss harvesting, and selective deployment of cash may enhance outcomes. With valuations stretched and macro risks abundant, broadening exposure beyond Mega Cap Tech and into uncorrelated assets—such as infrastructure, hedged equity, and real assets—may offer better risk-adjusted returns.

2025-9549

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7 Market Movers | September 5, 2025

Tom Bidinger — Fri, 05 Sep 2025 22:24:17 +0000

7 Market Movers | September 5, 2025 Tom Bidinger Fri, 09/05/2025 - 17:24

This week on 7 Market Movers, Wealth Enhancement Vice President of Portfolio Consulting Gary Quinzel discusses three key market movers: slowing economic growth, signaled by declining labor market indicators; increased expectations for a Federal Reserve rate cut this month; and investor sentiment remaining cautiously optimistic, with markets hitting new highs and broader participation beyond Mega Cap stocks, despite elevated valuations and seasonal headwinds.

Please contact our office if you have any questions you’d like to discuss.

2025-9095

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6 minutes

Gary Quinzel

September 2025 Market Commentary

Tom Bidinger — Fri, 05 Sep 2025 19:37:37 +0000

September 2025 Market Commentary Tom Bidinger Fri, 09/05/2025 - 14:37

From the period August 1 – August 31, 2025.

Executive Summary

U.S. equity markets remain near record highs, even as softer economic data emerges. Signs of a weakening labor market have strengthened expectations for Fed rate cuts—fueling optimism in risk assets. Yet, that same softness also raises concerns about a downturn in the economy.

What Piqued Our Interest

Markets Near Highs, But Warning Signs Emerge

Equities continued their climb in August, with the S&P 500 rising 2.03%, the Dow Jones gaining 3.42%, and Small Cap stocks rebounding with a 7.14% surge in the Russell 2000 Index. Despite these gains, the underlying data reflects a more cautious economic environment. The University of Michigan’s consumer sentiment index, as well as the Conference Board’s Leading Economic Index, both declined in their most recent release.

Meanwhile, equity valuations remain stretched. The S&P 500’s forward price-to-earnings (PE) ratio sits around 22.5, well above historical norms, suggesting markets may be vulnerable to downside surprises. Concentration risk also remains elevated, with the top 10 stocks in the index comprising almost 40% of the value, driving a disproportionate share of returns.

Labor Market Softening Sets Stage for Rate Cuts

Most notably, the labor market showed further signs of slowing in August. Following a disappointing July payrolls report, the Bureau of Labor Statistics’ JOLTS report showed that both job openings and voluntary quits have declined below pre-pandemic levels. This softening trend, coupled with downward revisions to earlier employment data, points to weakening labor demand.

This has shifted expectations around monetary policy, as investors increasingly anticipate a rate cut in September—particularly as inflation readings have remained tolerable. However, a complicating factor is the potential impact of recently enacted tariffs, especially on manufacturing inputs and consumer goods. While their inflationary impact has been modest so far, the lagged nature of pass-through costs could challenge the Fed’s ability to cut rates aggressively. Policymakers must now weigh a slowing labor market against the potential for renewed price pressures driven by trade policy.

September Seasonality and Valuation Risks

Historically, September has been one of the weakest months for U.S. equities, and given current stretched valuations, markets may be more susceptible to volatility. Portfolio rebalancing, tax planning, and post-summer positioning often amplify price movements during this period.

Though August saw broadening participation, especially among Small Caps and international stocks, investors have the right to be cautious. With macro indicators softening and monetary policy at an inflection point, the path forward may be less straightforward than recent gains suggest.

Market Recap

U.S. Equities: All major indexes posted gains in August. The Russell 2000 (+7.14%) and Dow Jones (+3.42%) outperformed, while the S&P 500 rose modestly (+2.03%). The Nasdaq 100 (+0.92%) lagged, consistent with a broader shift away from growth-dominated leadership.

International Equities: Developed markets (MSCI EAFE) surged 4.26%, while emerging markets rose 1.28%. The MSCI ACWI ex-US gained 3.47%, as global investors responded favorably to a weakening U.S. dollar and expectations for global rate cuts.

Fixed Income: The Bloomberg US Aggregate Bond Index gained 1.20%, supported by a pullback in Treasury yields. High-yield corporate bonds rose 1.25%, while municipal bonds posted a modest gain of 0.87%.

Commodities & Real Assets: The Bloomberg Commodity Index returned 1.93%, while the MSCI US REIT Index rallied 4.38%, though remains down -1.40% year-over-year, reflecting persistent stress in commercial real estate.

Year-to-Date Leaders: Growth stocks continue to dominate YTD performance, with the Nasdaq 100 (+11.98%) and Russell 1000 Growth (+11.33%) leading. International developed equities remain strong performers as well (MSCI EAFE +22.79%).

Wealth Enhancement Perspective

August reinforced the dichotomy between market performance and underlying economic data. While the artificial intelligence tailwind remains intact, and resilience of asset prices is encouraging, risks tied to tariffs, inflation, and employment warrant close attention. With September historically volatile, and policy at a crossroads, this is a prudent time to reassess portfolio exposures.

For long-term investors, volatility can present opportunities. Rebalancing, tax-loss harvesting, and deploying cash selectively may enhance long-term outcomes. Despite the strong returns, investors should look beyond the “Magnificent 7” and consider asset classes that have lower correlation to traditional stocks and bonds. Staying diversified, disciplined, and focused on fundamentals will be key as we move toward year-end.

2025-9093

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