The Week in Charts (7/1/25)
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The most important charts and themes in markets and investing…
1) Expect the Unexpected
After the US bombed Iran, stocks were expected to fall and Crude Oil was expected to spike.
But instead, this happened in the following week:
- S&P 500: +3.5%
- Crude Oil: -12%
- Volatility Index $VIX: -21%
As an investor, you need to learn to expect the unexpected. There’s no script for where the markets are going next.
2) There Is No Impossible in Markets
On April 8, the S&P 500 was off to one of its worst starts to a year in history, down 15% on the year.
After one of the greatest comebacks ever, it’s now up over 6% year-to-date, which is above the average year at this point in time.
A few months ago, that would’ve seemed impossible.
But there is no impossible in markets.
The S&P 500 has gained 22% over the last 12 weeks, one of the biggest short-term rallies in history.
And the 64% decline in the $VIX over the last 12 weeks is the biggest volatility crash in history.
The $VIX ended last week at 16.32, its lowest close since February 20.
3) All-Time Highs Again
The S&P 500 rallied 28% off of the April lows to hit its first all-time high since February 19 last week.
Yesterday, the index closed out the first half of 2025 at another all-time high, its 5th of the year.
What tends to follow an all-time high?
More all-time highs, with an average gain of 10% for the S&P 500 over the next year.
4) 3 Rate Cuts This Year?
- Stocks: all-time highs
- Home Prices: all-time highs
- Bitcoin: all-time highs
- Money Supply: all-time highs
- National Debt: all-time highs
- CPI Inflation: averaging 4% per year since 2020, double the Fed’s “target”
- Fed: expected to cut rates 3x by end of this year
You read that right.
The market is now pricing in 3 Fed rate cuts by the end of this year and 2 more in 2026. That would bring the Fed Funds Rate down to 3%.
5) An Inflection Point in the Housing Market
US housing market inventory continues to climb, with:
- Existing single-family home supply at 4.6 months, the highest since July 2016.
- New home supply at 9.8 months, the highest since 2022.
- Over 500k new homes for sale in the US, the most since November 2007.
The primary reason for rising inventories: a lack of affordability causing demand to plummet and houses to remain on the market longer.
You now need an income of over $100k to afford a starter home in the US, which is more than double the income needed just five years ago.
6) The White-Collar RIF
20% of companies in the S&P 500 have fewer employees today than a decade ago, including McDonald’s, General Motors, Procter & Gamble, Bank of America, and Walmart.
Most of the job cuts have been in “white-collar” departments, with reductions in staff, executives, and managers since the start of 2022…
Here’s the breakdown by job function. Legal is the only major role showing growth over the past 3 years…
7) A Few Interesting Stats…
a) US office-to-residential conversions are about to explode.
From a trickle today to a flood in 2027+ (if the announcements come true)
Empty office towers → apartments, condos, hotels.
The future of commercial real estate is going to look very different.
The reason for the shift can be seen in this one chart:
b) The spread between the highest & lowest yield among 5 major US asset classes is now less than 1%, the lowest on record.
- BofA US Corporate Bond Index: 5.07%
- 30-Year Treasury Bond: 4.78%
- S&P 500 (forward earnings yield): 4.45%
- 3-Month Treasury Bill: 4.30%
- 10-Year Treasury Bond: 4.23%
c) Gallup poll from this spring: 59% of Republicans were expecting gains for the stock market over the next 6 months versus just 12% of Democrats. The 47% spread between the two outlooks was the largest on record.
d) The average total cost to own and operate an automobile in the US has moved up to a record $12,296 per year, a 32% increase from the average cost just 5 years ago.
e) Ranked: The Countries With the Highest Wealth per Person
f) The US collected a record $22 billion in customs duties in May 2025, which was nearly 4x higher than the same month in 2024.
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Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.
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