MARKET WATCH
I hope all of you enjoyed the Independence Day break here in the USA, recharged your batteries, metaphorically speaking, and are ready for the second half of the year. The markets certainly have provided some thrills and chills getting to mid-year, but as Randall Forsyth in Barrons remarked, “a latter-day Rip Van Winkle who might have been napping since the start of the year might think not much had changed”. Of course, we know better.
After embarking on a near-bear market plunge in early April, the S&P 500* ended the first half of the year at a record 6,204.95 which was a 5.50 percent year-to-date (YTD) increase. Not to be outdone, the NASDAQ* recovered from bear market depths to finish the first half of 2025 by setting a new record at 20,369.73 and gaining 5.50 percent YTD. The staid DJIA*, having only entered correction territory, closed the first half at 44,094.77 adding 3.65 percent YTD. The small cap Russell 2000* ended the first half of the year at 2,175.04 losing 2.47 percent YTD.
On the economic front, the employment report, which was released on July 3, 2025 showed nonfarm payrolls increased by147,000 and the unemployment rate was little changed at 4.1 percent. The Consumer Price Index (CPI), the Producer Price Index (PPI) and the Personal Consumption Expenditures Price Index (PCE), all of which are measures of inflation, have been trending downward, but are still between 2.4 percent and 2.8 percent, depending on the index and whether food and energy have been stripped out. Gross Domestic Product (GDP) decreased by 0.5 percent in the first quarter, but the explanation for the decrease was the increase in imports ahead of possible tariffs. Imports are a subtraction from GDP in the overall calculation.
Jerome Powell, the Chairman of the Federal Reserve has endured a constant bashing by President Trump concerning interest rates. The Fed continues to hold the short-term federal funds rate at 4.25 – 4.50 percent. Obviously, the administration would like rates to be lower due to the amount of debt needing to constantly be refinanced. Until there is some real progress on trade deals and clarity on tariffs, the Fed could possibly hold rates steady through the summer.
Recently, Republicans exhibited some of the same discipline mirroring the control associated with Nancy Pelosi’s grip on the Democrats in the House of Representatives during her tenure as Speaker. With tight majorities in Congress the Republicans were able to deliver the “big, beautiful bill” to President Trump for his signature on the Fourth of July as he requested. While the bill is perfect by no means, it does manage to extend the 2017 tax cuts, delivers on some “pro-growth” policies and makes some cuts to the budget, depending on whose accounting you believe. The idea that the predictions of the Congressional Budget Office (CBO) or economists from either party or the private sector control the narrative on the merits of the bill is folly. It is the bond market that renders the final verdict.
As President Trump clamors for the Fed to lower short-term interest rates, the reaction by the bond market, which consists of many players, including you and I, is paramount in gauging the ultimate cost and worthiness of any legislation. In particular, the yield on the10-year Treasury, which has fallen from 4.89 percent to 4.35 percent since January 13th, is a very important factor. Remember, a lower yield on a bond means a higher price investors are willing to pay to finance government debt. You can bet this is one barometer the Fed will be evaluating as it considers short-term rates going forward. Since a positively sloping yield curve is indicative of a healthy economy, if longer term rates remain at this level or fall further, it will be possible and preferable for short-term rates to be lower.
Ultimately, further trimming of the federal budget, realistic and creative adjustments to the funding of Social Security, Medicare and Medicaid, as well as continued adoption of pro-growth economic policies are the answers. The question is will Congress step up, open their eyes and begin some of the necessary, bipartisan work.
OUR PRIVACY POLICY AT JERSEY BENEFITS & HAPPY 4TH OF JULY
At Jersey Benefits Group, Inc. and Jersey Benefits Advisors, we collect and use information from you on applications and other forms as well as information about financial transactions with us and from non-affiliated third parties. This “nonpublic personal information” is obtained in connection with providing a financial product or service to you. We do not disclose any nonpublic personal information about you without your express consent, except as permitted by law and only to provide services to you.
We may disclose the nonpublic personal information we collect to persons or companies that perform services on our behalf for your benefit. We restrict access to your non-public personal information and only allow disclosures to persons and companies as permitted by law to assist in providing products or services to you. We also maintain physical, electronic and procedural safeguards to protect your nonpublic personal information in all instances. If you have any questions about our privacy policy or how we safeguard your information, please don’t hesitate to contact me.
I do hope you had an enjoyable Independence Day and were able to reflect on the meaning of the holiday, relax some, and get to your destination without incident, if you were travelling. If you’d like to discuss your accounts in more detail, set up a contribution plan or have any questions regarding your investments, please feel free to contact me. Enjoy your summer!
I hope everyone had a great 4th of July while enjoying family, friends & awesome fireworks!
UNDERSTANDING THE HISTORY REGARDING THE US, IRAN, ISRAEL AND THE BOMB
Those of us of a certain age can remember with anger and humiliation the fall of the Shah of Iran and the Iranian Revolution. During that time, the Iranian people replaced the Shah with an equally despotic leader, the Ayatollah Khomeini. In late 1978 through March of 1979 the Shah fell and the Islamic Republic of Iran was established.
In November of 1979, Iranian students stormed the American Embassy and took 66 Americans hostage, because President Carter allowed the deposed Shah to come to America for medical treatment. The event was known as the Iranian Hostage Crisis and the excuse for taking the hostages, with the support of the Ayatollah, was because the Iranians believed Carter’s granting of medical treatment for the Shah was a US plot to restore the Shah to power.
This crisis lasted for 444 days, during which 52 of the hostages were held at the embassy. In April of 1980, we finally tried to do something to rescue the hostages, but Operation Eagle Claw, as the rescue mission was called, failed due to a severe sandstorm in the desert which caused three of the eight helicopters used in the mission to be inoperable.
So, the mission was aborted. During the withdrawal one of the retreating helicopters collided with a C-130 transport plane. This resulted in the deaths of eight US servicemen and left many Americans with less than a feeling of confidence in our leader and military. On January 20, 1981, minutes after Ronald Reagan was sworn in as President, the hostages were released.
Empowered by their cowering of the “Great Satan”, the reference made by the Ayatollah in 1979 regarding the US, Iran went on to build their proxies to sponsor terror worldwide, but especially towards Israel. If ever there was a country facing an “existential threat”, it is Israel. This is why keeping the Middle East nuclear weapon free has been a major goal of Israel.
On June 7, 1981, Israel struck the nuclear program in Iraq. This was a surprise to the US as well as the Iraqis. There was condemnation by the UN & the US. By 2007, when the Israelis took out Syria’s nuclear program, President Bush left the decision up to Prime Minister Ehud Olmert, according to an article written in the Wall Street Journal by Elliott Abrams, who served in the Reagan, Bush and Trump administrations.
Flash forward to June 2025 and the US and Israel have both taken the stand that Iran will not have a nuclear weapon. Karen Elliott House posited, “With a single blow, Mr. Trump restored America’s reputation in the region. At the same time, Russia and China, Iran’s supposed loyal allies, look impotent watching their partner being mauled. Equally important for the Saudis, the humiliation of Mr. Khamenei, the great leader of Shism, explodes the myth that God is on the side of the Islamists. If, as seems likely, the 86 year-old Ayatollah is either killed or sidelined, the Islamic Revolutionary Guard Corps, which underpins the theocracy, will likely keep Iran’s 90 million economically deprived citizens under control with force, not appeals to Allah.”
Happy Birthday America and I have to say poetic justice: YES!
Company Information
Jersey Benefits Advisors is the trade name used by John H. Kaighn to offer various products and services.
34 Doe Dr.
Woodbine, NJ 08270
Phone: (609) 827-0194
Fax: (866) 637-2479
Email: kaighn@jerseybenefits.com
http://jerseybenefits.com
John H. Kaighn is an Investment Advisor Representative & Registered Representative of Osaic Wealth, Inc. Securities and Advisory Services are offered through Osaic Wealth, Inc. Member FINRA & SIPC.
Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth, Inc.
18700 N. Hayden Rd.
Suite 255
Scottsdale, AZ 85255
Osaic Wealth, Inc. is not affiliated with Jersey Benefits Advisors or Jersey Benefits Group, Inc.
Jersey Benefits Group, Inc., is a licensed Insurance Agency in the State of New Jersey & offers Insurance and Third Party Administration Services
14 Atlantic Ave. Unit B
Ocean City, NJ 08226
Phone: (609) 827-0194
Fax: (866) 637-2479
Email: kaighn@jerseybenefits.com
http://jerseybenefits.com
All opinions expressed in this newsletter are independent of Osaic Wealth, Inc. and are solely those of John H. Kaighn and Jersey Benefits Advisors.
*The S&P 500, the DJIA, the NASDAQ and others referenced are unmanaged indices that are widely used as indicators of Market Trends. Past Performance does not guarantee future results and the performance of these indices does not reflect the fees and charges associated with investing. It is not possible to invest directly in an index.
*Dollar Cost Averaging through a systematic savings plan is an excellent way to build an account without a sizeable initial investment. Saving a portion of our pay each month is very important. Company sponsored pension plans are one method to save and should be used for retirement. Other systematic investment accounts, such as ROTH IRA’s, Traditional IRA’s, Coverdell Accounts, 529 Plans, Brokerage Accounts and Annuities can also be opened, and debited directly from checking or savings accounts. For more information, just call to set up an appointment. Referrals are always welcome.
John H. Kaighn
