“We’re winning, DON’T CELEBRATE!”

Greetings ~

I hope this finds you all well and that you are having an enjoyable summer. I have been blessed to spend quite a bit of time up in Ohio where the weather is much cooler than Florida. As the summer winds down, and before we know it, it will be football season. I don’t watch a lot of sports, but I am an Ohio State football fan. As a funny aside, my wife was driving on the island the other day and noticed that they were following ‘Big Nut’. Anyone who is a Buckeye fan will know who he is. He was headed to a local brewery on the island and word has it, he may live nearby. I’d like to party with that guy!

One rule Kristin has when we’re watching the game is that I am forbidden to ‘talk smack’. “We’re winning, don’t celebrate!”. As though the mere act of doing so may change the outcome of the game.

Perhaps we should apply that to the economy and the markets. July CPI data was released today showing that inflation held steady at 2.7% a tick below expectations. 

This, combined with labor data, hints that the economy remains healthy despite the tariffs. If you listen to pundits such as Mark Zandi and Jared Bernstien featured on CNBC, they are saying, “don’t celebrate yet, the worst is yet to come.” Perhaps, but in the “first quarter of the game” it appears that to turn an old phrase from Mark Twain, “the news of the economies demise is greatly exaggerated.”

The market seemed to cheer this data running back up to all-time highs. Our investment team made some adjustments to the portfolios this month to take some profits off the table in certain areas and put our equity percentages back in line with our models and reduce downside risk.

The fed is likely to cut interest rates next month, but again, don’t celebrate them yet! This should help bonds continue to build on their decent year and if we don’t have a major correction in the fall (see article below “Tis the Season”, my prediction for a good market year will likely hold true.

I will be back in Florida next week and will begin sending out review requests. As I highlighted in my last Quarterly Review and Investment Outlook, for those of you who have not taken advantage of a Tax Review or have not reviewed your accounts in some time, NOW is a good time to get something scheduled. I look forward to seeing you or talking with you soon!

Go Bucks!

It’s time to review last month’s key events and look ahead to what’s coming in the market and economic landscape. Download the latest edition of the Month-in-Review, developed by the Prime Capital Financial Investment Team!

Quick Takes:

• Stocks Rise. U.S. stock indices were higher in July as agreements on trade, positive economic data and strong earnings boosted shares. The S&P 500 rose by 2.4% while the Nasdaq 100 rose 3.3% and the Magnificent 7 rose nearly 8%. The Dow Jones Industrial Average fell 0.7% in July.
• Inflation and Interest Rates. The 10Y treasury yield rose in July to 4.4% as President Trump signed his Megabill into law on July 4. The bill extends the 2017 tax cuts, introduces deductions for tips and overtime, cuts Medicaid, and boosts spending on the military and immigration enforcement.
• Meme Stocks Rally. July was a month of meme stock euphoria as retail traders increased bets on speculative stocks like Kohl’s Corp. and Krispy Kreme Inc. These bets are often made because social media personalities promote the stocks. Here is our video on the topic.
• Texas Flooding. The Guadalupe River flooded in Kurr County, Texas as torrential rains caused the level of the river to rise sharply. Parts of the Hill Country, a rural area of about 20 counties west of Austin, were devastated with hundreds of residents killed or missing.

Here’s the inflation breakdown for July 2025 in one chart

 Published Tue, Aug 12 202511:00 AM EDT  

Key Points

• The consumer price index rose 2.7% in July on an annual basis, according to the Bureau of Labor Statistics.
• “Core” goods prices are at their highest annual inflation rate in about two years, evidence that Trump administration tariff policy is feeding through to higher prices, economists said.
  

View The Full Article Here

Jeffrey Gundlach Breaks Down the Fed’s Dilemma and His Market Outlook

‘Tis the Season

Fall in the stock market, particularly in the months of September and October, is a period often associated with seasonal volatility and a historical tendency for weak performance. This phenomenon is often referred to as the "September Effect" and the "October Effect." While these are not guaranteed outcomes and market dynamics are constantly changing, understanding these historical patterns can provide valuable context for investors.

The September Effect

Historically, September has a reputation as the worst-performing month for stocks. Since 1950, the S&P 500 has on average, posted a negative return for the month of September, making it the only month with a consistent long-term loss.

Possible Explanations for the September Effect:

• Post-Summer Trading: The summer months of July and August often have lower trading volume as many investors and traders are on vacation. When they return in September, there can be an influx of activity, including profit-taking and portfolio rebalancing, which can create downward pressure on the market.
• Tax-Loss Harvesting: As the end of the year approaches, investors may begin selling off losing stocks in September to realize losses for tax purposes, which can lead to selling pressure.
• Institutional Behavior: Some institutional investors may also sell off holdings at the end of the third quarter to "window dress" their portfolios, selling underperforming stocks to make their end-of-quarter reports look better.

The October Effect

October has a more complex reputation. On one hand, it's known for some of the most significant market crashes in history, including the Panic of 1907, the 1929 crash, and the Black Monday crash of 1987. This has led to the psychological expectation of an "October Effect," where investors brace for a downturn.

However, historical data shows that October, on average, has been a net positive month for stocks over the long term. It's often the month where bear markets end and new bull markets begin. This makes October a month of high volatility, it can see sharp declines, but also strong rallies.

Considerations for Investors

While these seasonal trends are interesting, it's crucial for investors to remember that they are historical averages, not predictors of future performance.

• Long-Term Perspective: For long-term investors, trying to time the market based on seasonal patterns is a risky strategy. The market's long-term upward trend has historically outweighed any short-term seasonal weakness.
• Diversification: A well-diversified portfolio is the best defense against short-term volatility, regardless of the time of year.
• Fundamentals Over Seasonality: Instead of focusing on calendar-based expectations, investors should prioritize a company's fundamentals, economic conditions, and overall market health.

 Don Williams

 CMFC®, CRPC®

Financial Advisor

View Don's Bio

Tyler Olson

Managing Director, Florida Operations

View Tyler's Bio

Ahmed Alasri

Office Administrator 

Sources:

https://www.nationwide.com/financial-professionals/blog/markets-economy/articles/stock-market-seasonality-doesnt-have-to-be-destiny-for-investors

https://www.investopedia.com/terms/s/september-effect.asp

https://www.lpl.com/research/blog/october-seasonals-trick-or-treat.html

https://www.finsyn.com/why-is-september-the-worst-month-for-the-stock-market/