Weekly Market Update for May 9, 2025
Markets were little changed Friday after a framework trade agreement was announced with the UK on Thursday, and hopeful that some progress can be made with China when Treasury Secretary Bessent meets with representatives this weekend. The S&P 500 finished the week down 0.47%, while the Nasdaq fell 0.27%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.38%, up 6 bps from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, fell 1 bps to 4.24%.
The Federal Reserve met this week and Chairman Powell expressed a continued “wait-and-see” approach to adjusting rates this year. We continue to expect two rate cuts this year and ultimately see the Fed Funds rate nearing 3.50% in 2026.
On the fixed income side, we have been “buying the dip” on big bank preferreds. Our favorites have been mega-cap banks like JP Morgan, Bank of America and Wells Fargo. We expect strong price appreciation over the next 12 months as the Fed continues to cut rates. The current yield on these top banks is +6.0% and the securities are priced below 80 cents on the dollar.
In equity portfolio news, body-camera manufacturer Axon reported strong revenue (+31% y/y) and EPS (+23%) growth, and raised its full-year guidance. The company hasn’t slowed down in signing new contract wins and is shifting more public safety officers to premium subscription plans with additional features. The stock responded accordingly to the good news, with shares rising 14% on Thursday. Non-portfolio company Disney also boasted a beat-and-raise quarter, showing strong growth in its streaming subscriptions as well as at domestic theme parks. Softness was seen amongst its Chinese consumers.
Looking ahead to next week, it quiets down on the earnings front while economic data flow picks up. Cisco Systems reports results on Wednesday and Walmart reports on Thursday. On Tuesday, the CPI inflation report for April will be released, with the PPI report out on Thursday. Both will be watched closely to determine what the initial effects of recent tariff policies are having on prices. Retail sales for April will be published Thursday and housing starts on Friday, with other data points sprinkled in throughout the week.
Here in MN the Summer weather has arrived. Get outside and enjoy the sunshine. And of course, Happy Mother’s Day!
The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment. Performance quoted is past performance. Past performance is not indicative of future performance. There is always a possibility of loss.
Current performance may be lower or higher than performance shown. Differences in performance versus the indices/funds may be attributable, in part, to differences in the asset make-up of the strategy vs. the indices/funds. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision. See www.ullandinvestment.com for important strategy disclosures.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investing involves risk; principal loss is possible. Investors should consider the investment objectives, risk, charges, and expenses of the strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors at www.ullandinvestment.com or 612.312.1400.
