Week of July 7, 2025
As has been noted many times, capital markets prefer certainty over uncertainty. Last week, several key uncertainties were alleviated: the signing of the One Big Beautiful Bill, signs that Iran’s uranium enrichment capabilities have been significantly curtailed, and a renewed commitment by NATO countries to increase defense spending—easing the financial burden on U.S. taxpayers. In response, the S&P 500 reached an all-time high. However, numerous uncertainties remain, most notably the growing U.S. budget deficit, accumulated national debt, and tariff policy. We remain reasonably confident that capital markets will not react favorably to ongoing deficit spending, and further uncertainty around tariffs makes it difficult for businesses to invest. Our Signals remain unchanged.
Bob Bilkie, CFA
