June 27, 2025

Worldwide Headlines

1. Fed Chair Powell defends FOMC actions before Congress. The Fed Chair went before both chambers of Congress this week with semi-annual monetary policy testimony. In those presentations, the Fed Chair noted that the Federal Market Open Committee is still on-hold with respect to monetary policy while determining whether tariff-induced inflation proves to be persistent or short-lived. The FOMC has not lowered its benchmark Fed Funds Rate in 2025.
2. S&P 500 hits a new intraday all-time high. As of this writing, the S&P 500 is above its all-time closing high of 6,144.15 on February 19, and above its intraday all-time high. The index currently stands at 6,176.94 with the Technology, Energy and Communication Services sectors leading upward in June.
3. U.S. Consumer Confidence takes another hit. The June reading for Consumer Confidence from the Conference Board fell to 93.0. This is versus a monthly average reading so far this year of 96.07. The cutoff date for the survey from the Conference Board was June 18, five days after Israel launched a series of strikes on Iranian targets. However, according to the Conference Board, tariffs remain top of mind among those surveyed.
4. Israel and Iran continue to honor a ceasefire. The two countries had ended a 12-day conflict with a ceasefire that was brokered by President Trump. The prospect of de-escalation between Israel and Iran has triggered a pullback in crude oil prices and now looks to include a brokered agreement on nuclear diplomacy.

Economic Reports

1. S&P Global US Composite PMI preliminary for June had reading above expectation at 52.8. The Manufacturing portion of the index saw a 52.0 reading with Services at 53.1.
2. Existing Home Sales in May came in at an above expectation level of 4.03 million units annualized. This compares to a monthly average of 5.22 million in data going back to 1999. Within the report, there was an increase in inventory for sale to 1.54 million houses (versus 1.28 million a year ago) and the median sales price increased 1.3% from a year ago to $422,800.
3. S&P CaseShiller 20-City Home Price Index from April showed a 0.31% drop in those housing prices month-over-month but are still higher by 3.42% from the prior year. Within the report, house price gains are highest from the previous year in New York (+7.95%), Chicago (+6.02%), Detroit (+5.50%) and lowest in San Francisco (+0.20%), Dallas (-0.21%), and Tampa (-2.15%).
4. Consumer Confidence in June fell to a 93.0 reading, which was below the estimate and last month’s reading. In addition, a measure of consumer expectations for the next six month fell by 4.6 points to a reading of 69.0 (versus the monthly average reading so far this year of 70.32).
5. New Home Sales in May were at a below than expected pace of 623,000 annualized units. Additionally, the previous month was revised downward to 722,000. The current monthly number is a seven-month low, but the median sales price increased 3% from a year ago to $426,600 last month, according to the U.S. Census Bureau.
6. Q1 GDP Revision No. 2 was noticeably lower from an initial -0.2% from the prior quarter to -0.5%. Inside the report, four of the five groupings were revised lower: Personal Consumption moved from +1.2% to +0.5%; Gross Private Investment from +24.4% to +23.8%; Exports revised from +2.4% to +0.4%; Imports +42.6% to +37.9%; and Government Consumption shifted -0.7% to -0.6%.
7. Weekly Initial Jobless Claims fell to 236,000 (from 246,000 the prior week), while Continuing Claims rose from 1.937 million the prior week to 1.974 million this week. Continuing Claims jumped to the highest level since November 2021. The highlight of the report seems to be that companies continue to hold on to employees but have slowed hiring.
8. Pending Home Sales Index from May rose 1.8% to a reading of 72.6, beating expectations. The increase came across all regions (East, Midwest, South, West) according to the National Association of Realtors (NAR). Despite the improvement, the still weak pending home sales numbers suggest the home resale market remains stuck going into the Summer.
9. Personal Incomes during May declined by 0.4% from the prior month, while Personal Spending also pulled back 0.1%. Both numbers were less than expected. Spending on Transportation Services, Meals Out, Accommodation, Financial Services and other services all fell last month. Motor vehicle purchases also dropped 6%. Personal Incomes moved lower on a pullback in government services, led by a decrease in Social Security payments. The inflation data, inside the report, showed an as-expected 0.1% increase in the PCE Price Index from the prior month (and higher by +2.3% from the prior year).

Markets this Week (mid-day Friday)

1. U.S. Dollar Index is lower. DXY at 97.212 or -1.44% so far this week (1 yr. range = 97.147 to 109.956).
2. Bond yields are lower. Two-year Treasury yield down to 3.73%; 10-year slower to 4.25%.
3. Stocks are higher. All five of the major global stock indexes we track are higher so far this week in the 2-4% range. 4. Commodities are lower. Five of the six sectors in the Bloomberg Commodity Index are lower so far this week, only Base Metals is higher.

Next Week

1. Economic Reports
   • ISM Manufacturing Index, Construction Spending, JOLTS Job Openings Survey, Monthly Vehicle Sales, Monthly Employment Report, Factory Orders, ISM Services Index
     • U.S. consensus QoQ real GDP est.: Q1 = -0.5%, Q2 = +2.0%, Q3 = +0.8%, Q4 = +1.2%
     • U.S. consensus YoY inflation est.: Q1 = +2.7%, Q2 = +2.5%, Q3 = +3.1%, Q4 = +3.3%
2. Earnings Reports (Q2-2025 quarterly earnings season begins July 11th)
   • Q2-2025 S&P 500 EPS estimate at the beginning of the period = +2.78%
   • Q2-2025 S&P 500 summary to date: n/a reported; n/a beat estimate; YoY EPS = n/a
   • S&P 500 YoY EPS estimates: Q1-2025 = +13.5%, Q2-2025 = +2.7%, Q3-2025 = +6.6%, Q4-2025 = +6.1%
3. Events
   • Central bank meetings in the Dominican Republic and Poland
   • U.S. Independence Day; July 4th holiday