Weekly Newsletter 06/06/25

Good afternoon and wishing you and yours all the best.

The financial and political week went by like a high school drama. Two polarizing rivals had a phone call to “increase cooperation” and plan a get together giving a little boost to markets. At the same time two former friends became rivals with each trading barbs on social media about how cool and great they are and how crazy and dumb the other is. The market reaction was negative, diminishing previous boost. They too have agreed to try and make peace…I can see both pouty faces now. The nerds (looking at you Fed officials) remain at their own lunch table discussing things like the “beige book”, how difficult it is to gauge economic strength given front-loading tariffs, caution on greater upside risks to inflation and greater downside risks to employment and output growth, believing the current policy stance is well positioned. At the other nerd table, US trade reps giddy with themselves as recently fast-tracked trade negotiations are advancing quickly, "Very constructive" meetings with EU and progress with many Asian trade partners. The cool kid table is discussing the easiest AI learning model to use for homework and their favorite app to fool their parents. The jocks are playing hockey in Canada and basketball in Indiana for nostalgia.

Headlines have primarily driven our short-term results and captured most of the attention. However, as my seasoned business partner reminds me, “markets typically revert back to the mean.” What does that mean? The S&P 500 just posted its best returns for May since May of 1997. This could make for a more difficult set up in the near term. Noted potential tailwinds: 1) the continued AI secular growth theme in the headlines with well-received results from Microsoft and Meta at the beginning of the month and Nvidia at the end, along with Google event and the sovereign AI focus surrounding Trump's Middle East trip. 2) Q1 earnings season better with S&P 500 earnings growth of +13.3% vs +7.2% expected at the end of the Q and tariff mitigation strategies helping to cushion the broader macro uncertainty messaging. 3) Consumer resilience theme underpinned by updates on May trends from Visa and Mastercard, while consumer confidence jumped in May, increasing for first time in five months. 4) Systematic strategy re-leveraging another factor behind outsized May strength…”systematic strategy re-leveraging” is just a fancy term for borrowing money to make investments…something we are entirely against and what causes the biggest problems in finance.

Summer has already started in SWFL and as the temps increase across the country, folks hit the road or take to the skies on their “quest for fun” ala Clark Griswold. I hope you have a fun trip or two planned. My fondest childhood memories are the family adventures I was lucky enough to experience in Wyoming, Colorado and Dakotas. Like most childhood experiences I didn’t fully appreciate them at the time. The lesson learned for me is to try and do the same for my kids while at the same time understanding they will not appreciate the time, money, effort and experience as much as I would hope in the moment, but maybe they will later in life. In a stoke of luck only a parent can understand, my least favorite vacation is my wife and kids favorite: a cruise. My favorite kind of getaway is one of their least favorites. Several years ago, we stopped and spent the day and night at a friend’s house just outside of Jackson WY and the Tetons. The next night we had a cabin in Yellowstone at the Canyon Lodge, a short walk to the “Grand View” of the Grand Canyon of Yellowstone and the spectacular views of the Lower Falls and the canyon itself. The look on their faces upon entering the cabin to find no TV, no wi-fi, no tech nothing was hilarious to me. First words: “I want to go back to Rusty and Maria’s house.”

The hockey and basketball playoffs have been entertaining (the parts I’ve been able to stay awake for) with both league’s finals just beginning. I’m rooting for the Panthers in hockey and the Pacers in hoops. Hardcore baseball fans have been treated to a crazy beginning of the college baseball playoffs. The top two seeded teams have already lost and we are still a week away from Omaha.

Stay balanced my friends. The link below has additional financial articles and resources for your review.

https://www.raymondjames.com/evangelista/resources

“There are two things children should get from their parents: roots and wings.”― Johann Wolfgang von Goethe

Thank you,
KYLE CHRISTIANSON, CFP®
Financial Advisor
Raymond James & Associates, Inc.

1421 Pine Ridge Rd, Ste 300
Naples, FL 34109
Toll Free (800) 843-2025 | Direct (239) 513-6525 | Main (239) 513-6500 | Fax (239) 596-5474
Kyle.Christianson@RaymondJames.com

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