The Markets

How fast will an AI-powered economy grow?

Global economic growth has not always been robust. Until the 1700s, economic growth averaged about 0.1 percent per year and was closely tied to population growth. “Bigger harvests allowed more mouths to be fed; more farmers allowed for bigger harvests,” reported The Economist. Eventually, better-nourished people had ideas about how to improve their lives, and economic growth edged higher.1

Innovation, investment, and productivity have helped to accelerate global economic growth. Economists measure economic growth (and contraction) using gross domestic product, or GDP, which is the value of all goods and services produced in a region over a period of time.

We live in prosperous times.

In the 20^th century, the total amount of goods and services produced exceeded the total amount of goods and services produced in recorded human history. “Between the years 1900 and 2000 world GDP at constant prices has increased about 19-fold, corresponding to an average annual rate of growth of 3 percent,” reported the International Monetary Fund’s research department.²

Some countries’ economies grew faster than others. In 2024, the United States had the largest economy in the world (GDP of about $30 trillion).3 China had the second largest economy (GDP of about $19 trillion, in U.S. dollars),4 and Germany had the third largest (GDP of about $4.7 trillion, in U.S. dollars).5

AI is expected to increase the pace of economic growth, although there is debate about the magnitude of the change. In MIT Management, Dylan Walsh reported:

“Artificial intelligence research is filled with dramatic forecasts. AI will affect almost 40 [percent] of jobs around the world, according to the International Monetary Fund. It will increase global GDP by $7 trillion — or 7 [percent] — over 10 years, predicts Goldman Sachs. Or it will grow between $17.1 and $25.6 trillion annually, if you prefer to go with McKinsey’s estimate. And these projections are relatively conservative compared with others…MIT Institute Professor Daron Acemoglu has a more conservative estimate of how AI will affect the U.S. economy over the next 10 years…the GDP boost would likely be closer to 1 [percent] over that period, Acemoglu suggests.”6

“My assessment is that there are indeed much bigger gains to be had from generative AI, which is a promising technology, but these gains will remain elusive unless there is a fundamental reorientation of the industry…in order to focus on reliable information that can increase the marginal productivity of different kinds of workers, rather than prioritizing the development of general human-like conversational tools,” wrote Acemoglu, who is an economist.⁷

Last week, the Standard & Poor’s 500 Index closed at a new high every day, reported Connor Smith of Barron’s.⁸ (On June 30, 33 percent of the index was invested in technology stocks.9) The Dow Jones Industrial Average and Nasdaq Composite also finished higher.8 Yields on U.S. Treasuries were mixed over the week.10

Data as of 7/25/25	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	1.5%	8.6%	18.3%	17.2%	14.6%	11.9%
Dow Jones Global ex-U.S. Index	1.4	17.8	16.7	11.2	6.6	4.1
10-year Treasury Note (yield only)	4.4	N/A	4.3	2.8	0.6	2.2
Gold (per ounce)	-0.4	28.1	41.4	24.8	11.5	11.8
Bloomberg Commodity Index	-1.6	4.8	6.9	-4.3	8.6	1.2

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

PLANNING YOUR VACATION? AI CAN HELP. Some people enjoy travel planning. They read books about the destination, review online publications for restaurant, hotel, and event information, and ask friends (or locals) for tips and suggestions. But travel planning is not everyone’s jam. If you love vacations and dread the planning, AI travel-planning apps may prove useful, as long as you understand the limitations.

“Travel has become one of the most popular use cases for AI… While AI agents that can manage the entire process of planning and booking your vacation are still some way off, the current generation of AI tools are still pretty handy at helping you with various tasks,” reported Rhiannon Williams of MIT Technology Review.1¹

Here are two things to keep in mind when using AI to plan a trip:

Develop detailed prompts. “Prompts” are the questions you ask AI. Detailed and descriptive prompts tend to produce better answers. Don’t worry, prompts don’t have to be perfect. You can start with the basics like, “What are easy day trips from Rome by train?” Once you have the answer, you can modify your wording and add context, helping AI deliver more detailed and specific information.1² The more you practice, the better you’ll get. AI can:

• Build itineraries,
• Provide packing lists,
• Offer location history and interesting trivia,
• Recommend top restaurants,
• Offer family-friendly and budget-friendly insights, and
• Tailor visits to your preferences.

Fact-check the answers. Unfortunately, it’s not a good idea to accept the information AI provides as fact. “AI models are prone to making stuff up, which means you should always double-check their suggestions yourself,” reported Williams.¹¹

For example, Bloomberg reporter Catherine Thorbecke asked AI to recommend “the best beef noodles in my area [Thailand] — with the very specific request that the shop had to accept credit cards.” The restaurant had fantastic beef noodles, but it only accepted cash.1³

Regardless, Thorbecke found AI to be a valuable travel companion. She wrote, “I found the tool to be incredibly helpful while navigating a foreign city, using it not just to find spots to eat but also to translate menus and signs, as well as communicate with locals via voice mode. It felt like the ultimate Asia travel hack.”¹³

It’s important to remember that AI may be susceptible to scam travel websites, just like humans are. If an AI travel app directs you to a site for booking, make sure to verify that the site is real. One way to check is by reviewing the web address. Fake websites have URLs that are very similar to those of real websites. The tipoff is usually that the fake address is misspelled, includes strange characters, or has an incorrect domain extension (e.g., .net instead of .com).1⁴

WEEKLY FOCUS – THINK ABOUT IT

“The wish to travel seems to me characteristically human: the desire to move, to satisfy your curiosity or ease your fears, to change the circumstances of your life, to be a stranger, to make a friend, to experience an exotic landscape, to risk the unknown.”1⁵

― Paul Theroux, Author

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stocks of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

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Sources:

[1] https://www.economist.com/briefing/2025/07/24/what-if-ai-made-the-worlds-economic-growth-explode or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-28-25-The-Economist-What-If-AI%20-%201.pdf

2 https://www.elibrary.imf.org/display/book/9781557759368/ch005.xml

3 https://fred.stlouisfed.org/series/GDP

4 https://fred.stlouisfed.org/series/MKTGDPCNA646NWDB

5 https://fred.stlouisfed.org/series/MKTGDPDEA646NWDB

6 https://mitsloan.mit.edu/ideas-made-to-matter/a-new-look-economics-ai

⁷ https://shapingwork.mit.edu/wp-content/uploads/2024/05/Acemoglu_Macroeconomics-of-AI_May-2024.pdf

8 https://www.barrons.com/livecoverage/stock-market-news-today-072525?mod=hp_LEDE_C_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-28-25-Barrons-S&P-500-Caps-Off-Perfect-Week%20-%208.pdf

9 https://www.spglobal.com/spdji/en/indices/equity/sp-500/#overview [Go to documents/factsheet/ S&P 500 USD]

10 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025

[1]¹ https://www.technologyreview.com/2024/07/08/1094733/how-to-use-ai-to-plan-your-next-vacation/

[1]² https://www.huit.harvard.edu/news/ai-prompts#

[1]³ https://www.bloomberg.com/opinion/articles/2025-07-24/will-ai-help-or-wreck-your-summer-vacation or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-28-25-Bloomberg-Will-AI-Help-or-Wreck%20-%2013.pdf

[1]⁴ https://us.norton.com/blog/online-scams/online-travel-booking-scams

[1]⁵ https://www.goodreads.com/author/quotes/9599.Paul_Theroux

The Markets

This is not the inflation you’re looking for…

In general, everyone who buys goods or services in the United States would prefer to see prices trend lower – and that’s what happened in the earlier part of this year. Over the last couple of months, though, inflation has begun to creep higher.1

Last week, the Consumer Price Index (CPI), a well-known measure of inflation, showed prices moving higher in June. The only goods that did not show price increases in June were new and used vehicles.2 “Even with only limited signs of increasing effects from tariffs, inflation is once again accelerating in America. The total measure of inflation in June was right in line with expectations on Tuesday, but it was still a significant jump in the wrong direction,” reported Megan Leonhardt of Barron’s.3

Here’s a look at how prices have changed this year.

2025 CPI	Headline inflation (All prices, year over year)	Core inflation (excluding food and energy prices, year over year)
June	2.7 percent	2.9 percent
May	2.4 percent	2.8 percent
April	2.3 percent	2.8 percent
March	2.4 percent	2.8 percent
February	2.8 percent	3.1 percent
January	3.0 percent	3.3 percent
Source: Bureau of Labor Statistics1

The CPI provides two inflation measures: headline inflation, which shows how all prices changed, and core inflation, which excludes volatile food and energy categories.4

Gathering the data for the CPI requires boots on the ground. “Prices are collected each month in 75 urban areas across the country from about 6,000 housing units and approximately 23,000 retail establishments—department stores, supermarkets, hospitals, gas stations, and other types of stores and service establishments,” reported the Bureau of Labor Statistics.5 

Recently, staff reductions have made it more challenging for the government to complete the monthly inflation survey, reported Matt Grossman of The Wall Street Journal.6 When hard data is not collected, the staff relies on estimates. In the past, about 10 percent of CPI survey data was estimated, according to economist Torsten Sløk. In May, that number rose to 30 percent – almost one-third of the data in the survey.⁷

Last week, earnings season got off to a good start. John Butters of FactSet anticipates that the Standard & Poor’s 500 Index will report “year-over-year growth in earnings above 9 [percent] for the second quarter.”8 Strong earnings boosted investor confidence. The Standard & Poor’s 500 Index rose over the week, and the Nasdaq Composite finished at a new record high. However, the Dow Jones Industrial Average ended slightly lower.9 Yields on shorter maturities of U.S. Treasuries generally moved lower over the week, while yields on longer maturities of U.S. Treasuries moved higher.1⁰

Data as of 7/18/25	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	0.6%	7.1%	13.6%	18.0%	14.1%	11.5%
Dow Jones Global ex-U.S. Index	0.4	16.1	12.2	11.4	6.4	3.6
10-year Treasury Note (yield only)	4.4	N/A	4.1	3.0	0.6	2.4
Gold (per ounce)	0.1	28.5	39.6	25.0	13.1	11.8
Bloomberg Commodity Index	1.2	6.4	6.2	-3.5	9.7	0.9

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

ABOUT MONEY AND HAPPINESS…In 2010, Nobel Laureates Daniel Kahneman and Sir Angus Deaton investigated how money influences happiness. They measured as people’s daily sense of emotional well-being and their lifetime sense of accomplishment as proxies for happiness. The pair concluded that, “More money does not necessarily buy more happiness, but less money is associated with emotional pain.” In addition, the emotional benefits of earning more money leveled off when income reached $75,000.¹¹ (The real median income in the United States was about $66,700 in 2010, according to the U.S. Census Bureau via FRED.¹²)

In 2021, the relationship between money and happiness was revisited by Matthew Killingsworth, a senior fellow at the Wharton School. The study found, “Larger incomes were robustly associated with both greater experienced well-being and greater evaluative well-being…There was no observed plateau in experienced well-being…either around $75,000/y or at any other income level.”¹³ (The real median household income in the U.S. was about $79,200 in 2021, according to the U.S. Census Bureau via FRED.¹²)

To try and understand the contradiction in findings, Kahneman and Killingsworth engaged in an adversarial collaboration mediated by Wharton professor Barbara Mellers. After reviewing the data sets, they concluded, “In the low range of incomes, unhappy people gain more from increased income than happier people do. In other words, the bottom of the happiness distribution rises much faster than the top in that range of incomes. The trend is reversed for higher incomes, where very happy people gain much more from increased income than unhappy people do.”¹⁴

WEEKLY FOCUS – THINK ABOUT IT

“Research is formalized curiosity. It is poking and prying with a purpose.”¹⁵

― Zora Neale Hurston, Writer and anthropologist

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

1 https://www.bls.gov/news.release/archives/cpi_06112025.htm; https://www.bls.gov/news.release/archives/cpi_05132025.htm; https://www.bls.gov/news.release/archives/cpi_04102025.htm; https://www.bls.gov/news.release/archives/cpi_03122025.htm; https://www.bls.gov/news.release/archives/cpi_02122025.htm

2 https://www.bls.gov/news.release/cpi.nr0.htm

3 https://www.barrons.com/livecoverage/cpi-inflation-report-june-data-release-today or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-21-25-Barrons-Inflation-is-on-the-Rise%20-%203.pdf

4 https://www.investopedia.com/terms/h/headline-inflation.asp

5 https://www.bls.gov/opub/hom/cpi/design.htm

6 https://www.wsj.com/economy/cpi-inflation-data-accuracy-8bd2a8ae or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-21-25-WSJ-Economists-Raise-Questions%20-%206.pdf

7 https://www.apolloacademy.com/cpi-data-quality-declining/#:

8 https://insight.factset.com/sp-500-will-likely-report-earnings-growth-above-9-for-q2

9 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-21-25-Barrons-DJIA-S&P-Nasdaq%20-%209.pdf

10 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025

11 https://www.pnas.org/doi/full/10.1073/pnas.1011492107#sec-1

12 https://fred.stlouisfed.org/series/MEHOINUSA672N

13 https://www.pnas.org/doi/full/10.1073/pnas.2016976118#sec-1

14 https://www.pnas.org/doi/10.1073/pnas.2208661120

15 https://www.goodreads.com/quotes/49307-research-is-formalized-curiosity-it-is-poking-and-prying-with

The Markets

Are financial markets too complacent?

In Aesop’s fable, The Boy Who Cried Wolf, a young shepherd repeatedly raises a false alarm. Eventually, the people in his village ignore his warnings. When a wolf appears, the villagers pay no attention to the boy’s cries, confident that “nothing ever happens”.¹

Some pundits fear investors have become similarly complacent. “Wall Street’s tolerance for shock is becoming heroic,” wrote Isabelle Lee and Denitsa Tsekova of Bloomberg. “First came the inflation angst, then the tariff crash, then the war in the Middle East. At this point, it’s hard to imagine what could still rattle the investor class.”²

Since April’s tariff-induced downturn, investors have pushed U.S. stocks steadily higher, focusing on positive news – resilient U.S. economic data, solid corporate earnings growth, and the potential of artificial intelligence, reported Paul R. LaMonica of Barron’s.³

Despite tariff uncertainty, rising deficit and debt levels, and ongoing geopolitical conflicts, the Standard & Poor’s (S&P) 500 and Nasdaq Composite Indexes closed at record highs last Thursday. In addition, the Dow Jones Industrial Average (Dow) was nearing its first new high since December 2024, reported Connor Smith of Barron’s.⁴

Then, on Friday, investor confidence hiccupped.

“Record highs and down weeks don’t typically go together, but the declines themselves are relatively minuscule, especially given the tariff headlines generated during the week—the possibility of 50 [percent] levies on Brazil and 35 [percent] on Canada, among others, if negotiations don’t go well—and continued attacks on Federal Reserve Chair Jerome Powell. The S&P 500, after all, is still up 26 [percent] from its April low and has gained 6.4 [percent] this year,” reported Jacob Sonenshine of Barron’s.⁵

By the end of the week, the S&P 500 and Dow were lower, while the Nasdaq eked out a gain.⁶  Yields on longer maturities of U.S. Treasuries ended higher.7

Data as of 7/11/25	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	-0.3%	6.4%	12.1%	17.5%	14.7%	11.5%
Dow Jones Global ex-U.S. Index	-0.2	15.6	10.8	11.4	6.5	3.7
10-year Treasury Note (yield only)	4.4	N/A	4.2	3.0	0.6	2.4
Gold (per ounce)	0.6	28.4	39.1	24.4	13.2	11.3
Bloomberg Commodity Index	0.4	5.1	3.1	-3.7	9.3	0.4

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

THE BIG BEAUTIFUL BILL IS NOW THE LAW OF THE LAND. President Trump signed the One Big Beautiful Bill Act (OBBBA) into law on the Fourth of July. The $3.8 trillion tax and spending package is a wide-ranging piece of legislation. The OBBBA’s “extraordinary breadth and ambition position it as one of the most consequential pieces of legislation in recent congressional history,” wrote Holland & Knight law.⁸

The legislation extended the tax changes from 2017’s Tax Cuts and Jobs Act that would have expired later this year. Here is a brief review of some of the new provisions:

• A higher standard deduction. Anyone who doesn’t itemize will benefit from a change in the standard deduction. In 2025, the standard deduction will increase by $750 for single tax filers (from $15,000 to $15,750) and by $1,500 for those who file jointly (from $30,000 to $31,500), according to Michael Townsend of Schwab.⁹

• A larger child tax credit: Families with children may benefit from a $200 increase in the child tax credit. The credit is reduced and phased out at higher income levels ($200,000 of modified adjusted gross income (MAGI) for single tax filers and $400,000 for those who file jointly), reported Kamaron McNair of CNBC.¹⁰

• A temporary bonus for seniors: From 2025 through 2028, some Americans who are age 65 or older will benefit from a $6,000 special deduction. To qualify, they must have modified adjusted gross income of less than $75,000 for single tax filers or $150,000 for those who file jointly.⁹

• A temporary increase in state and local tax (SALT) deduction caps. The cap for SALT tax deductions, which include property taxes, will be $40,000 in 2025. The amount will increase one percent a year for four years before dropping back to $10,000 in 2030.⁹

• New caps on student loan amounts. The law limits the amounts students and parents can borrow from the government to pay for education. Beginning in 2026, graduate students can borrow $20,500 per year with a lifetime limit of $100,000 ($200,000 if pursuing a professional degree). The student lifetime borrowing limit for federal student loans will be $257,500.¹¹

• Elimination of green-energy tax credits. If you’ve been thinking about making energy-efficient home improvements or purchasing an electric vehicle, now is the time. These tax credits will be eliminated at the end of 2025.¹¹

• Temporary tax relief on tips and overtime. From 2025 to 2028, workers will be able to deduct up to $25,000 in tips and up to $12,500 in overtime pay.¹¹

There are many other provisions – savings accounts for newborns, auto loan interest deduction, higher estate tax exemptions, changes to health savings account eligibility – that may affect your financial plans. If you would like to talk about these changes, please get in touch.

WEEKLY FOCUS – THINK ABOUT IT

“The $3.4 trillion price tag for the OBBBA will drive the national debt to unprecedented levels, but that figure does not include associated interest costs from the higher level of borrowing needed to foot the bill. Interest costs on the legislation will add approximately $700 billion to federal deficits over the next 10 years, bringing the total cost of the legislation to $4.1 trillion.”¹²

― Peter G. Peterson Foundation

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

1 https://en.wikipedia.org/wiki/The_Boy_Who_Cried_Wolf

2 https://www.bloomberg.com/news/articles/2025-07-11/battle-hardened-wall-street-bulls-are-proving-very-hard-to-scare or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-14-25-Bloomberg-Battle-Harderned-Wall-Street%20-%202.pdf

3 https://www.barrons.com/articles/stocks-record-goldilocks-risks-25610b9f?refsec=markets&mod=topics_markets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-14-25-Barrons-Stocks-Are-Hitting-Records%20-%203.pdf

4 https://www.barrons.com/livecoverage/stock-market-news-today-071025 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-14-25-Barrons-Dow-Falls-Nearly-280-Points%20-%204.pdf

5 https://www.barrons.com/articles/second-quarter-earnings-s-p-500-record-highs-ed489727?refsec=the-trader&mod=topics_the-trader or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-14-25-Barrons-How-Second-Quarter-Earnings%20-%205.pdf

6 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-14-25-Barrons-DJIA-S&P-Nasdaq%20-%206.pdf

7 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025

8 https://www.hklaw.com/en/insights/publications/2025/07/the-one-big-beautiful-bill-act-a-comprehensive-analysis

9 https://www.schwab.com/learn/story/tax-bill-moves-on-to-senate-whats-next

10 https://www.cnbc.com/2025/07/09/trump-spending-bill-child-tax-credit.html

11 https://www.hklaw.com/-/media/files/insights/publications/2025/07/onebigbeautifulbillcomprehensiveanalysis.pdf?rev=02a78d4e65d8461bbb7b4e3c87ceab42&hash=A0C00C098DA5EF8A28DC7108B90F9D45

12 https://www.pgpf.org/article/the-one-big-beautiful-bill-act-is-the-most-expensive-reconciliation-package-in-recent-history/

The Markets

Like riders on a giga coaster, investors experienced fear and exhilaration during the second quarter of 2025.

From April through June, investors rode markets up and down, banking through twists of news and events that had market moving potential. They swooped through the uncertain impact of tariffs on economic growth and inflation; the implications of a U.S. Treasury downgrade; the effects of fiscal policy changes in the Big Beautiful Bill; and conflicts in Ukraine and the Middle East.¹  Here are some highlights from the quarter:

• Tariff turmoil. In early April, President Trump announced tariffs on a much larger scale than anyone expected, startling investors and raising concerns about economic growth and price inflation, reported Sarah Hansen of Morningstar.² The CBOE Volatility Index (VIX), which is known as Wall Street’s fear gauge, shot up to 60.³ (Any reading above 30 signals a high level of fear, risk, and anticipated volatility.)⁴ As the VIX rose, the stock market fell.

“The Dow shed 2,000 points in a day for the fourth time in the index’s history. All told, U.S. stocks shed some $6.6 trillion in market cap in the past two days based on preliminary figures…That’s the largest two-day market cap slide for U.S. listed stocks on record,” reported Connor Smith of Barron’s.⁵

• A fast recovery. President Trump delayed immediate action on tariffs, opening the door to trade negotiations. His actions reassured investors, and U.S. stocks climbed to new highs. Through last week, “The S&P 500 is up 26 [percent] from the selloff low on April 8, while the Nasdaq has surged 34.9 [percent], as the worries, from supersized tariffs to the U.S.’s artificial-intelligence dominance, have slowly faded,” reported Teresa Rivas of Barron’s.⁶

International stocks performed even better than U.S. stocks did. “European stocks, a thoroughly unloved asset class in January, have trounced the S&P 500 by 16 percentage points in dollar terms, the biggest outperformance since 2006…After underperforming the US market every year since 2017, developing-country equities are finally winning, helped by a boom in [artificial intelligence] companies from Taiwan, South Korea and China,” reported Alice Gledhill, Malavika Kaur Makol and Sagarika Jaisinghani of Bloomberg.⁷

• Excellent earnings growth. During earnings season, companies let investors know how they performed in the previous quarter. Collectively, companies in the Standard & Poor’s (S&P) 500 Index reported earnings growth of 12.9 percent for the first quarter of 2025. It was the second consecutive quarter of double-digit earnings growth, reported John Butters of FactSet. (Earnings are a measure of profitability.)⁸

Tariffs were the hot topic on earnings calls. They were mentioned by 427 S&P 500 companies.⁷ Some companies were concerned about tariffs. Some were not. The head of a financial firm told Sabrina Escobar of Barron’s, “The simple truth today is that we don’t yet know where trade policy will settle, nor do we know what the actual transmission effects will be on the real economy.”⁹

• The U.S. Federal Reserve (Fed) kept rates unchanged. Despite significant pressure from the administration to stimulate the economy by lowering rates, the Fed left the federal funds rate unchanged. At the end of the quarter, inflation was near the Fed’s two percent target and unemployment remained low. Both suggest the economy remains resilient.¹⁰

Major U.S. stock indexes continued to move higher last week, with the S&P 500 and Nasdaq finishing the week at record highs.¹¹ Yields onU.S. Treasuries moved higher last week after a stronger-than-expected employment report lowered expectations that the Fed might cut the federal funds rate in July, reported Sean Conlon, Alex Harring, and Sawdah Bhaimiya of CNBC.^12,13

Data as of 7/3/25	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	1.7%	6.8%	13.4%	17.9%	14.6%	11.7%
Dow Jones Global ex-U.S. Index	0.3	15.9	13.7	11.1	7.0	3.7
10-year Treasury Note (yield only)	4.4	N/A	4.4	2.8	0.7	2.3
Gold (per ounce)	1.8	27.6	41.1	22.6	13.5	11.1
Bloomberg Commodity Index	0.5	4.7	1.2	-2.6	9.3	0.4

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

PATRIOTIC FEELINGS. Last week, Americans celebrated the Fourth of July. Independence Day has been a national holiday since 1941, but the tradition began long before that. Americans have been celebrating Independence Day since “the 18th century and the American Revolution. On July 2nd, 1776, the Continental Congress voted in favor of independence, and two days later delegates from the 13 colonies adopted the Declaration of Independence, a historic document drafted by Thomas Jefferson. From 1776 to the present day, July 4th has been celebrated as the birth of American independence, with festivities ranging from fireworks, parades and concerts to more casual family gatherings and barbecues,” according to History.com.¹⁴

A recent survey asked Americans about the Fourth of July, patriotism and the American Dream. Here’s what they said:¹⁵

WEEKLY FOCUS – THINK ABOUT IT

“This is your democracy. Make it. Protect it. Pass it on.”¹⁶

― Thurgood Marshall, Former Supreme Court Justice

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss. * Consult your financial professional before making any investment decision.

Sources:

1 https://www.barrons.com/articles/stock-market-fed-rate-cuts-d0252a07?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-Stocks-Are-Flying-the-Dollar-is-Falling%20-%201.pdf

2 https://www.morningstar.com/markets/13-charts-q2s-major-market-rebound

3 https://finance.yahoo.com/news/cboe-volatility-index-vix-measured-153231819.html

4 https://www.cboe.com/tradable_products/vix/ [Video 1:15]

5 https://www.barrons.com/livecoverage/stock-market-today-040425 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-Nasdaq-Enters-Bear-Market%20-%205.pdf

6 https://www.barrons.com/articles/stock-market-hits-record-highs-tax-bill-jobs-6f818d48? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-Stocks-Hit-Record-Hights%20-%206.pdf

7 https://www.bloomberg.com/news/newsletters/2025-06-30/rollercoaster-first-half-is-ending-with-stocks-at-records or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Bloomberg-Rollercoaster-First-Half-Is-Ending%20-%207.pdf

8 https://insight.factset.com/earnings-insight-infographic-q1-2025-by-the-numbers

9 https://www.barrons.com/articles/tariffs-earnings-calls-stock-ccab0e3b or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-CEOs-Are-Saying-These-2-Ominous%20-%209.pdf

10 https://www.federalreserve.gov/newsevents/pressreleases/monetary20250618a.htm

11 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/07-07-25-Barrons-DJIA-S&P-Nasdaq%20-%2011.pdf

12 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025

13 https://www.cnbc.com/2025/07/03/us-treasury-yields-investors-await-junes-big-jobs-report-.html

14 https://www.history.com/articles/july-4th

15 https://d3nkl3psvxxpe9.cloudfront.net/documents/July_Fourth_poll_results.pdf 16https://www.usatoday.com/story/news/2024/06/19/patriotic-quotes-america-usa/74070993007/#