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Date
July 21, 2025
The second quarter began on a weaker note. On April 2, “Liberation Day”, President Trump imposed sweeping tariffs with most of our trading partners. This led to a global selloff. The S&P 500 plunged close to 10 percent in two days, its worst two-day decline in five years. Then, a week later the President announced a 90-day pause before reaching a temporary trade deal with China just days later. By mid-May the markets had turned positive, and by quarter end the markets were making new highs. International markets finished even stronger, and bonds rose for the quarter.
The Fed held rates steady during the quarter partially in anticipation of a tariff-triggered inflation increase, which has been elusive. It is important to keep in mind that only 11% of our GDP is imported product as noted by the Chicago Fed President, Austan Goolsbee. Consensus expectation is for the Fed to have two 25 basis point rate cuts later this year. Overseas the European Central Bank (ECB) cut rates in early June, which is its eighth cut in the last 12 months.
Despite the volatility, the markets had an excellent quarter. U.S. large caps ended the quarter up 10.94% (S&P 500) while U.S. small caps were up 8.50% (Russell 2000). International stocks were up 11.78% (EAFE), and international small caps were up 16.59% (EAFE Small Cap). We have a bias to small cap international. Domestically, value was up a more modest 3.79% (Russell 1000 Value). The U.S. aggregate bond market was up 1.21% while short-term Treasuries were up 1.07% for the quarter. Our defensive fixed income was up over a percent for the quarter and appreciated during the sell-off, displaying diversification and ballast.
We may be entering a prolonged phase where international equities outperform their U.S. counterparts, driven by more compelling valuations, rising fiscal stimulus abroad, and the European Central Bank’s proactive rate cuts. Currently, one-third of our equity allocation is invested in international markets. We are overweight in value, small cap, and quality (profitable) companies, while our fixed income is held in high AA rated bonds (weighted average).
As always, if you have any questions or would like to discuss your investments, please reach out. Your Resource Consulting Group advisor is here to help.
Benchmark Returns for the Period Ended June 30, 2025
| Quarter | 1 Year* | 5 Year* | 10 Year* | |
|---|---|---|---|---|
| US Treasury Bills (0-3 months) | 1.07% | 4.75% | 2.82% | 1.97% |
| Bloomberg US Agg Bond | 1.21% | 6.08% | -0.73% | 1.76% |
| Standard & Poor’s 500 | 10.94% | 15.16% | 16.64% | 13.65% |
| Russell 1000 Value (large cap value) | 3.79% | 13.70% | 13.93% | 9.19% |
| Russell 2000 (small cap) | 8.50% | 7.68% | 10.04% | 7.12% |
| Russell 2000 Value (small cap value) | 4.97% | 5.54% | 12.47% | 6.72% |
| MSCI Europe, Australasia and Far East (EAFE) | 11.78% | 17.73% | 11.16% | 6.51% |
| MSCI Europe, Australasia and Far East (EAFE) Small Cap | 16.59% | 22.64% | 9.28% | 6.51% |
| MSCI Emerging Markets | 11.99% | 15.29% | 6.81% | 4.81% |
| Wilshire REIT | -1.24% | 9.13% | 8.67% | 6.30% |
Resource Consulting Group is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.
This is not an offer to buy or sell securities, nor should anything contained herein be construed as a recommendation or advice of any kind. Consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. No investment process is free of risk, and there is no guarantee that any investment process or investment opportunities will be profitable or suitable for all investors. Past performance is neither indicative nor a guarantee of future results. You cannot invest directly in an index.
These materials were created for informational purposes only; the opinions and positions stated are those of the author(s) and are not necessarily the official opinion or position of Hightower Advisors, LLC or its affiliates (“Hightower”). Any examples used are for illustrative purposes only and based on generic assumptions. All data or other information referenced is from sources believed to be reliable but not independently verified. Information provided is as of the date referenced and is subject to change without notice. Hightower assumes no liability for any action made or taken in reliance on or relating in any way to this information. Hightower makes no representations or warranties, express or implied, as to the accuracy or completeness of the information, for statements or errors or omissions, or results obtained from the use of this information. References to any person, organization, or the inclusion of external hyperlinks does not constitute endorsement (or guarantee of accuracy or safety) by Hightower of any such person, organization or linked website or the information, products or services contained therein.
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