Market Insights Recap — Week of July 28, 2025

Hello, I'm Steve Orr, Chief Investment Officer for Texas Capital’s Private Bank.

Shuffling along to new records, but no changes. So what do these things mean for our portfolios? What should we be thinking about? Two-thirds of the way through the summer. Is this the biggest news week of the year? I think so. Just a sample of what's on tap. Fed meeting, jobs report, four of the Mag Seven report, tariff news and wars that just won't go away. 

So shuffling along. The economy continues to shuffle, just slowly improving from the first quarter. If you've traveled anywhere this summer, you've seen plenty of truck traffic. TSA screenings at airports are at an all-time high. Service jobs are plentiful. Manufacturing numbers, kind of flat, mostly waiting on tariffs. We expect better than 2% growth this quarter, a nice improvement over the first quarter's negative headline. 

Company earnings' growth? Running double Wall Street's estimates. One-third of the S&P 500 has reported so far. Earnings are growing around 6% over last year's second quarter. This week, Apple, Facebook, Microsoft and Amazon report, so six of the Magnificent Seven will have turned in their report cards. And the key for this high-tech group is their amazing capital expenditures. Buying chips from NVIDIA and others and building data centers all over the country. The Mag Seven are the new industrials, building air conditioned server farms instead of steel mills. Other notables this week include Boeing, Visa, eBay and UPS. So earnings in the economy, doing just fine. Keep your positions.

And what about stocks? Well, last five days of last week, S&P 500, all-time highs every day. And the Nasdaq set a couple of records also. Now last week we comfortably passed the 1,000-day mark since the October 2022 lows. And over that span, the S&P 500 has risen 78%. Now, that's just a little shy of the average 1,000-day bull cycle at 114%. So this rally needs to get it in gear. But when a bull cycle passes 1,000 days, it tends to go on for several more years. Very consistent with our forecast that this bull has several years left to run. So, if you're in, your fine.

What's on hold? The Fed. Expect Waller and Bowman to dissent on Wednesday and vote for a cut in rates. But the Fed's not going to change rates anytime soon, not at least until after the Jackson Hole speeches given at the Kansas City Symposium in August. Now, Friday, that's jobs day. Nonfarm payrolls likely grew 110,000 in July. Steady growth and an unemployment rate that's going to continue to sit right at 4%. Remember full employment? One of the duties of Congress pushed on the Fed. So, they're fine. They see no reason to change rates as long as unemployment is so low.

Let's wrap it up. Rates are stable. Spreads are tight. Borrow when you can, not when you have to. Earnings are coming in good. Stock market's a bit stretched here at all-time highs. A 4 to 6% correction in the next few weeks would actually help the rally extend into the fall and winter. Our indicators are green, but they're also telling us to be patient. If you do not have to put money in the market right now, best to wait for a pullback. So let us know how we can help; 'til next time.