The Markets
Major U.S. stock indexes raced to new highs last week.
In a remarkable recovery from April’s double-digit downturn, the Standard & Poor’s (S&P) 500 Index raced to a new record high last week, and so did the Nasdaq Composite Index (Nasdaq). Key drivers behind the ascent included:
Investor optimism. Last week, the “Bull and Bear” investor sentiment indicator rose to its highest level since last November, reported Martin Baccardax of Barron’s. Easing of tensions in the Middle East lifted investor optimism. As the region settled, oil prices moved lower, quelling concerns that rising oil prices would push inflation higher.
Consumer sentiment. The University of Michigan’s Consumer Sentiment Index improved 16 percent in June, although it remained 18 percent below December’s reading. Expectations for personal finances and business conditions improved. However, “consumer views are still broadly consistent with an economic slowdown and an increase in inflation to come,” reported Surveys of Consumers Director Joanne Hsu.
Muted inflation. It was widely expected that higher tariffs would mean higher inflation. So far, that hasn’t been the case. In May, U.S. government revenue from tariffs surged to a record high, reported Jarrell Dillard of Bloomberg, and consumer prices remained relatively steady. The Personal Consumption Expenditures (PCE) Index showed core inflation, which excludes volatile food and energy prices, rose 2.7 percent year over year. That was slightly above expectations, reported Nicole Goodkind of Barron’s.
Trade optimism. While concerns remain about the impact of tariffs on inflation, investors gained confidence that the outlook for trade is improving. “Trump administration officials have recently softened the focus on the self-imposed July 9 deadline for deals. On Friday, Treasury Secretary Scott Bessent [said] he hoped to have trade wrapped up by Labor Day and described the latest pact with China as de-escalatory,” reported Reshma Kapadia and Elsa Ohlen of Barron’s.
While current market momentum is impressive, “Some market watchers are cautioning that valuations are looking lofty, and that the S&P 500 would need an earnings boom or drastic Federal Reserve interest-rate cuts to justify current levels,” reported Natalia Kniazhevich of Bloomberg.
U.S. stocks faltered on Friday after an announcement that trade negotiations with Canada would not take place, reported Karishma Vanjani of Barron’s. However, the S&P 500 and Nasdaq still finished the week at record highs. Yields on longer maturities of U.S. Treasuries moved lower over the week.
| Data as of 6/27/25 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|---|---|
| Standard & Poor’s 500 Index | 3.4% | 5.0% | 12.6% | 16.5% | 15.1% | 11.6% |
| Dow Jones Global ex-U.S. Index | 3.0 | 15.5 | 14.9 | 10.0 | 7.4 | 3.6 |
| 10-year Treasury Note (yield only) | 4.3 | N/A | 4.3 | 3.2 | 0.6 | 2.3 |
| Gold (per ounce) | -2.9 | 25.3 | 40.8 | 21.5 | 13.1 | 10.8 |
| Bloomberg Commodity Index | -3.6 | 4.2 | 1.5 | -5.5 | 9.9 | 0.2 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
How Affordable Are Homes In The United States?
In the United States, homes are less affordable than they’ve been in a while. The Atlanta Federal Reserve’s Home Ownership Affordability Monitor tracks whether households earning a median income can afford a median-priced home. The Fed calculates that a home is affordable when the annual cost of owning it is less than 30 percent of a household’s annual income.
In April 2025 (the most recent data available), a median-priced home was out of reach for a median-income household.
By the Fed’s calculations, a median-income household would need to spend 46 percent of its annual pay to own a median-priced home. To afford the home, the household would need annual income of about $123,000, an increase of about 55 percent. Here are the Fed numbers from April:
- Median income: $79,409
- Median home price: $392,500
- Rate on a 30-year fixed-rate mortgage: 6.7%
- Median monthly payment (includes principal, interest, taxes, homeowners’ insurance and private mortgage insurance): $3,069
- Percent of pay needed to meet annual cost of homeownership: 46%
Homeowners’ Insurance Is Becoming More Expensive
In some regions of the U.S., homeowners’ insurance is becoming more costly – and harder to acquire. “Homeowners in communities affected by substantial weather events are paying far more than those elsewhere. From 2018 to 2022, consumers living in the 20 percent of zip codes with the highest expected annual losses to buildings from climate-related perils paid… 82 percent more than those in the 20 percent lowest climate-risk zip codes,” reported the U.S. Department of the Treasury.
How Are Younger People Buying Homes?
Younger Americans are employing a variety of strategies to make a home purchase possible. According to a survey by a leading home sale site, aspiring Gen Z and Millennial homebuyers are:
- Working two jobs (39%),
- Receiving cash gifts from family (36%),
- Taking money from retirement plans early (22%),
- Spending an inheritance (16%), or
- Living with parents/family members to save money (13%).
If you’re interested in helping a loved one with a home purchase, please get in touch. We can help discuss the options.
Weekly Focus – Think About It
“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.”
—Shel Silverstein, Author
Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management
Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
- Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
- Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
- The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
- All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
- The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
- The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
- Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
- The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
- The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
- International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
- Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
- Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
- Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
- Past performance does not guarantee future results. Investing involves risk, including loss of principal.
- You cannot invest directly in an index.
- Stock investing involves risk including loss of principal.
- The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted and are subject to change. Investing involves risk including loss of principal.
- The Price-to-Earning (P/E) ratio is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means investors are paying more for each unit of net income, thus, the stock is more expensive compared to one with a lower P/E ratio.
- These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
- This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
- The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
- Consult your financial professional before making any investment decision.
Sources:
https://www.barrons.com/articles/stocks-rally-earnings-jobs-manufacturing-c98862f5 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-30-25-Barrons-Stocks-Have-Powered-Past%20-%201.pdf
https://www.bloomberg.com/news/articles/2025-06-11/us-tariff-revenue-hits-fresh-record-helping-shrink-may-deficit or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-30-25-Bloomerg-Us-Tariff-Revenue-Hits-Fresh%20-%203.pdf
https://www.bea.gov/sites/default/files/2025-06/pi0525.pdf [Table 7]
https://www.barrons.com/articles/inflation-pce-fed-rates-95c66d65 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-30-25-Barrons-Inflation-Spending-Data-Leave%20-%205.pdf
https://www.barrons.com/articles/us-china-trade-deal-trump-lutnick-tariffs-0cab501a or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-30-25-Barrons-Trump-Ends-Talks-with-Canada%20-%206.pdf
https://www.bloomberg.com/news/articles/2025-06-27/s-p-500-rally-faces-key-test-as-profit-engine-is-seen-sputtering or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-30-25-Bloomberg-S&P-500-Rally-Faces-Key-Test%20-%207.pdf
https://www.barrons.com/livecoverage/stock-market-news-today-062725?mod=hp_LEDE_C_1
https://www.atlantafed.org/research/data-and-tools/home-ownership-affordability-monitor [Affordability chart and Affordability Gap chart tabs] or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-30-25-Federal-Reserve-Bank-Atlanta-Home-Affordabilty%20-%2010.pdf
https://home.treasury.gov/news/press-releases/jy2791
https://www.redfin.com/news/gen-z-millennial-down-payment-family-help/
https://www.goodreads.com/quotes/tag/anything-can-be
ADV & Investment Objectives: Please contact The Dowling Group if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.
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