Weekly Market Update (June 29, 2025)

Market Hedwig
Jun 28
2 min read

HIGHLIGHTS

S&P500 hit all-time high this week. The current rally is having extremely narrow breadth and is concentrated.

Q2 Earnings: S&P500 earnings season will begin in mid-July. It should provide insights on the tariff’s impact on companies. Companies and consumers will absorb the cost of tariff, resulting in risk of lower margins and higher inflation.

Central Banks: Under the current environment, data is not pointing to a clear direction of cut or hike. Also, the data has not captured the large policy changes yet. Decision-making is likely to be more challenging, despite reduced geopolitical risk.

Fed: Fed proposed to ease capital requirements for large US banks and allow them to take on more leverage, especially on low risk assets like Treasuries. Markets expect it would improve the liquidity in Treasury market and build resilience.

MARKETS

Nasdaq	20,273.46	+4.25%
S&P 500	6,173.07	+3.44%
Dow	43,819.27	+3.82%
10-Year	4.28%	-10bps
Brent	66.39	-14.08%
DXY	97.25	-1.54%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: We suggest adding equities exposure globally. The structural growth trends including AI and energy will continue to drive the equity market returns.

Standard Chartered: We recommend using any volatility to add Asia ex-Japan equities, where gains are expected to be led by China. Risk from US suspension for semiconductors is limited.

Fixed Income

Morgan Stanley: Bond outperformed US equities this year despite headwinds of Fed policy pivot and potential tariff-linked inflation. We expect Treasuries and Investment Grade bonds to continue to outperform as valuation is relatively low, bond yields remain high, and potential rate cuts and deregulation as catalysts.

UBS: Markets have been pulling back from the long-end US bonds, mainly driven by the concerns over fiscal policy. Net outflow reached US$11 billion in Q2, fastest pace since COVID.

Economy

Goldman Sachs: S&P500 sales forecast reflects a solid demand outlook. Nominal GDP growth is expected to be 4.5% in 2025 and 5% in 2026. The weakening USD should create less headwind to non-US sales than previously expected.

Barclays: Markets are shifting focus from tariff and tax to macro data. Eyes on deceleration in US and sluggish growth in the EU. Inflation remains key focus in Japan.

KNOWLEDGE TRANSFER

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.