Market Update

June 30, 2025

U.S. MARKETS

LONG TERM INDICATORS

The Sherman Portfolios DELTA-V Indicator measuring the Bull/Bear cycle finished the week in a Bull status at 56.74, up 4.74% from the prior week’s 54.31. It has signaled Bull since June 27, 2025.

The Sherman Portfolios DELTA-V Bond Indicator measuring the Bull/Bear cycle finished the week in BULL status at 57.91, up 4.59% from the prior week’s 55.37. It has signaled Bull since December 15, 2023.

SHORT TERM INDICATORS

GALACTIC SHIELD — POSITIVE for Q2 2025: This indicator is based on the combination of U.S. and International Equities trend statuses at the start of each quarter.

STARFLUX — Positive: Starflux ended the week at 12.03 (Up 2.56% last week) This short-term indicator measures U.S. Equities.

STARPATH — Positive: This indicator measures the interplay on dual timeframes of our Type 1s + the Russell 3000 + our four most ‘pro-cyclical’ Type 3s, vs. Cash.

U.S. COMMODITIES / FUTURES OVERVIEW

THE VOLATILIY INDEX for 2025 (VIX)

VIX closed at 16.32 this week, a 20.9% decrease vs last week’s close of 20.62.

INTERNATIONAL MARKETS

U.S. MARKET NEWS

Slight increase in inflation, while business grows:

Inflation edged slightly higher in May, with the Bureau of Economic Analysis’ personal consumption expenditures (PCE) price index—considered the Fed’s preferred inflation gauge—showing core PCE rose 0.2% month over month and 2.7% year over year, both just above expectations and up from April’s 0.1% and 2.6% readings; the headline index matched forecasts with a 0.1% monthly and 2.3% annual increase, while personal income and spending unexpectedly declined despite estimates for modest gains. Meanwhile, the University of Michigan’s final June Index of Consumer Sentiment showed consumer expectations for year-ahead inflation fell sharply from 6.6% in May to 5% in June, with the sentiment index itself climbing 16% to 60.7 as concerns over tariff-related inflation eased. In business activity, S&P Global reported that U.S. growth continued at a modest pace in June, with the Flash U.S. Composite Output PMI dipping slightly to 52.8 from May’s 53.0, supported by the first increase in manufacturing output since February despite a slight slowdown in services, while inflationary pressures persisted with costs rising at the second-fastest pace since early 2023, largely attributed to tariffs.

INTERNATIONAL MARKET NEWS

Europe

In local currency terms, the pan-European STOXX Europe 600 Index rose 1.32% as a ceasefire between Israel and Iran appeared to hold and fears of an extended trade conflict subsided, while prospects for German economic stimulus and increased NATO military spending also supported equities; Germany’s DAX surged 2.92%, France’s CAC 40 Index gained 1.34%, Italy’s FTSE MIB advanced 1.30%, and the UK’s FTSE 100 Index edged up 0.28%. Meanwhile, June purchasing managers’ surveys signaled the eurozone economy remained sluggish, with the preliminary HCOB Eurozone Composite PMI holding steady at 50.2—barely indicating expansion—as services activity improved slightly, German output rebounded from a five-month low to show modest growth, but France’s economy continued to struggle with its composite PMI staying in contractionary territory for a 10th consecutive month.

Japan

Japan’s stock markets posted strong gains over the week, with the Nikkei 225 Index climbing 4.55% and the broader TOPIX Index rising 2.50%, driven by solid advances in technology stocks and improved investor risk appetite amid easing fears of a global trade war and signs that the Iran-Israel ceasefire was holding. Meanwhile, the yield on the 10-year Japanese government bond stayed around the low 1.4% range as the Bank of Japan maintained its cautious approach to monetary policy normalization, while the yen strengthened to approximately JPY 144 per U.S. dollar from about JPY 146 the week before. In inflation data, the Tokyo-area core consumer price index, a leading indicator for national trends, rose 3.1% year over year in June—below the 3.3% consensus and down from May’s 3.6%—as renewed government subsidies helped moderate price increases, though inflation remains well above the BoJ’s 2% target, bolstering expectations for further interest rate hikes.

China

Mainland Chinese stock markets advanced after news that the U.S. and China had finalized a trade understanding reached in Geneva last month, with the onshore CSI 300 Index rising 1.95% and the Shanghai Composite Index gaining 1.91% in local currency terms, while Hong Kong’s Hang Seng Index rallied 3.2%, according to FactSet. The framework, announced Thursday by U.S. Commerce Secretary Howard Lutnick, temporarily eased trade tensions, and Beijing confirmed parts of the accord on Friday, which reportedly included China’s pledge to supply rare earths, though details were sparse and key issues like fentanyl trafficking were not addressed. Economically, the People’s Bank of China noted signs of improving confidence but highlighted weak domestic demand and ongoing deflationary pressures, stating after its quarterly policy meeting that it would maintain a flexible, “moderately loose” monetary policy aimed at sustaining stable growth and keeping prices within a reasonable range.

HIGHLIGHTED STORY

https://www.visualcapitalist.com/visualizing-global-equity-returns-so-far-in-2025/

June 23, 2025

U.S. equities continue to see tepid returns in 2025, weighed down by a weak dollar and trade disruptions.

Instead, several global equity markets—from the Hang Seng Index to European stocks—are booming. While policy support in China is driving returns, massive defense spending is contributing to gains across German and Italian indices. This graphic shows year-to-date global equity returns, based on data from TradingView.

Key Insights:

As of June 13, 2025, the Hang Seng Index has returned 19.3%—the strongest returns across leading global equity markets While mainland China’s market remains sluggish, Hong Kong’s Hang Seng Index is surging, driven by investor optimism around DeepSeek.

Additionally, retail giant Shein is reportedly considering shifting its IPO from London, while battery maker CATL raised over $4 billion in an IPO in May. With U.S. markets seeing muted returns, the Hang Seng is positioning itself as the world’s top IPO destination in 2025.

Meanwhile, Germany’s DAX 40 Index is up 18.1%, aided by a 500-billion-euro infrastructure fund. Adding to this, falling inflation coupled with a strong euro are providing favorable conditions for interest rate cuts. Like Germany, Italy’s major index has seen strong gains of 15.4%.

With year-to-date returns of 7.1%, Canadian equities remain resilient despite the economy’s vulnerability to global trade tensions. This strength is likely due to its defensive sector mix, attractive valuations, and fear of fatigue of tariff tensions.

As we can see, U.S. markets have lagged in 2025—though some standout performers have emerged. Palantir leads the S&P 500 with a remarkable 82% return so far, while NRG Energy and Howmet Aerospace have each surged over 50%, driven by momentum in the AI and defense industries.

Best Regards,

Cliff M. Robello, CFP®, ChFC

Sheri Cabral, President

 

CMR Financial Advisors | (808) 537-2912

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