The Markets
Was inflation higher, lower, or steady?
Perspective has a tremendous influence on how we perceive the world around us. If you saw any three-dimensional chalk drawings on sidewalks this summer, you understand how perspective affects understanding. When seen from one direction, a chalk drawing looks flat. When seen from another, a winged dragon surges from a hole in the pavement.
Last week, major news sources had varied perspectives on inflation. Here are a few of the headlines we saw:
“Core Inflation Rises to 3.1 [percent]” (Barron’s)1
“Inflation holds steady…” (CNN)2
“Inflation cools slightly in July from prior month” (Fox Business)3
Remarkably, all were correct. The news sources simply highlighted different aspects of the Consumer Price Index (CPI). Here’s what the CPI showed for June and July of this year.4,5
| June 2025 (month to month) | July 2025 (month to month) | June 2025 (year over year) | July 2025 (year over year) | |
| Headline inflation (all items measured) | 0.3% | 0.2% | 2.7% | 2.7% |
| Core inflation (excludes volatile food and energy prices) | 0.2% | 0.3% | 2.9% | 3.1% |
Headline inflation moved slightly lower, on a month-to-month basis (from June to July). It remained steady year over year, which is the 12-month period through July 2025. In contrast, core inflation, which excludes volatile food and energy prices, moved slightly higher on a month-to-month basis (from June to July). It increased year over year.4,5
The Federal Reserve (Fed)’s target for inflation is 2 percent.6
The Producer Price Index (PPI) came out last week, too. It tracks how prices have changed for groups that produce and sell goods and services. It was up 3.3 percent in July, year over year, which was higher than June’s 2.4 percent increase.7
“U.S. wholesale inflation accelerated in July by the most in three years, suggesting companies are passing along higher import costs related to tariffs. The producer price index increased 0.9 [percent] from a month earlier, the largest advance since consumer inflation peaked in June 2022…,” reported Augusta Saraiva of Bloomberg.8
Last week, major U.S. stock indexes continued to rally.9 U.S. Treasury yields were mixed. Yields for some shorter maturities of Treasuries moved lower, while yields on longer maturities rose.10
Data as of 8/15/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.9% | 9.7% | 16.4% | 14.5% | 13.8% | 11.9% |
| Dow Jones Global ex-U.S. Index | 1.8 | 19.7 | 17.8 | 10.3 | 6.4 | 4.3 |
| 10-year Treasury Note (yield only) | 4.3 | N/A | 3.9 | 2.8 | 0.7 | 2.2 |
| Gold (per ounce) | -1.7 | 27.8 | 36.3 | 23.4 | 11.1 | 11.5 |
| Bloomberg Commodity Index | -0.4 | 1.6 | 4.4 | -6.1 | 6.9 | 1.1 |
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.
WHERE ARE INTEREST RATES HEADED? One of the drivers behind the recent stock market rally has been an expectation that the U.S. Federal Reserve (Fed) will respond to softening economic data by lowering the federal funds rate, reported Saeed Azhar, Johann M Cherian and Sanchayaita Roy of Reuters.11
Fed rate cuts are intended to stimulate economic growth by making it less expensive to borrow money. When it’s cheaper to borrow, companies’ expenses may fall and profits can increase, lifting stock prices, reported Mary Hall of Investopedia.12
After last week’s Consumer Price Index was released, expectations for a September Fed rate cut soared above 90 percent, according to CME FedWatch.13 “Inflation is still higher than the Federal Reserve would like — but not high enough to stop the central bank from cutting interest rates next month. That’s investors’ takeaway from yesterday’s consumer price index report,” reported Phil Serafino and Edward Bolingbroke of Bloomberg. 14
The catch is that a Fed rate cut doesn’t always have the intended effect. Sometimes, the Fed reduces or increases the federal funds rate and other interest rates don’t follow suit. Bloomberg Economics Chief Economist Tom Orlick explained:
“Let’s cast our minds back briefly to the early 2000s, to [former Fed Chair] Ben Bernanke and to the famous savings glut hypothesis. So, back then, the Fed was hiking [the federal funds rate] but long-term Treasury rates weren’t going up. Bernanke said it’s because there’s a glut of global savings. All of this money is coming from China and Saudi into the U.S. Treasury market…that situation is reversed and we’re no longer in a world with a savings glut. We’re in a world with a savings shortage. And that means it doesn’t matter who President Trump appoints as the next Fed chair…that savings shortage is going to mean that long-term rates, the 10-year Treasury yield stays high and…we think 4 to 5 percent for the 10-year Treasury is the new normal.”15
The 10-year U.S. Treasury note yielded 4.27 percent at the start of last week. By week’s end it was at 4.33 percent.10
WEEKLY FOCUS – THINK ABOUT IT
“I don’t think there’s too much normal out there anymore. Though there’s still plenty of average to go around.”16
― John David Anderson, Author
Sources:
1 https://www.barrons.com/livecoverage/inflation-july-cpi-rate-report/card/core-inflation-rises-to-3-1–UD6vxFsucLKhK6pJYSX8 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-Core-Inflation-Rises-1.pdf
2 https://www.cnn.com/2025/08/12/economy/us-cpi-consumer-inflation-july
3 https://www.foxbusiness.com/economy/cpi-inflation-july-2025
4 https://www.bls.gov/news.release/cpi.nr0.htm
5 https://www.bls.gov/news.release/archives/cpi_07152025.htm
6 https://www.richmondfed.org/publications/research/econ_focus/2024/q1_q2_federal_reserve
7 https://data.bls.gov/timeseries/WPUFD4&output_view=pct_12mths
9 https://www.barrons.com/market-data or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-Barrons-Market-Graphs-9.pdf
11 https://www.reuters.com/world/us/sp-500-nasdaq-hit-new-closing-highs-rate-cut-hopes-2025-08-13/
12 https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/
13 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-FedWatch-Market-Rate-Probabilities-11.pdf
14 https://www.bloomberg.com/news/newsletters/2025-08-13/fed-rate-cut-bets-ramping-up-after-inflation-data?srnd=phx-economics-v2 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-Fed-Rate-Cut-Bets-12.pdf
The Markets
U.S. companies have been hitting it out of the park!
Earnings season happens four times every year. It’s the period of time when publicly traded companies report how they performed during the previous quarter. So far, in aggregate, the companies in the Standard & Poor’s (S&P) 500 Index have delivered solid results for the second quarter of 2025.1
“Overall, 66 [percent] of the companies in the S&P 500 have reported actual results for Q2 2025 to date. Of these companies, 82 [percent] have reported actual EPS [earnings per share] above estimates, which is above the 5-year average of 78 [percent] and above the 10-year average of 75 [percent]. If 82 [percent] is the final number for the quarter, it will mark the largest percentage of S&P 500 companies reporting a positive EPS surprise for a quarter since Q3 2021 (also 82 [percent]),” reported John Butters of FactSet.1
While many U.S. companies had an excellent second quarter, economic clouds are shadowing investor optimism.
“Investors are struggling with a contradiction at the heart of the market as stocks move into their toughest months of the year. On the one hand, earnings have been strong. On the other, economic data are showing signs of weakness. How the two variables play out could determine whether the stock market can keep rallying to new highs—or stumbles into an end-of-summer selloff,” explained Martin Baccardax of Barron’s.2
Recent economic data show a softening labor market and weaker consumer spending. (Consumer spending is the primary driver of U.S. economic growth.)3 In addition, activity in the manufacturing and service sectors slowed.4 Nazmul Ahasan of Bloomberg reported:
“The Institute for Supply Management’s index of services declined last month to 50.1, below all estimates in a Bloomberg survey of economists. Readings above 50 indicate expansion…The data, released Tuesday, paint a picture of a sluggish service economy wrestling with the fallout of higher tariffs, cautious consumers and [policy] uncertainty…The services sector is by far the largest in the U.S. economy, and has helped drive growth this year while the manufacturing industry contracted for five straight months.”5
Last week, the major U.S. stock indexes rallied. The Nasdaq Composite Index closed at a record high, while the Standard & Poor’s 500 Index and Dow Jones Industrial Indexes finished the week close to new highs, reported Amalya Dubrovsky , Brett LoGiurato and Laura Bratton of Yahoo! Finance.6 U.S. Treasury yields generally moved higher. The 30-year Treasury bond yielding 4.85% at the end of last week.7
Data as of 8/8/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 2.4% | 8.6% | 20.1% | 15.6% | 13.7% | 11.8% |
| Dow Jones Global ex-U.S. Index | 2.6 | 17.6 | 19.5 | 10.2 | 6.5 | 3.9 |
| 10-year Treasury Note (yield only) | 4.3 | N/A | 4.0 | 2.8 | 0.6 | 2.2 |
| Gold (per ounce) | 1.4 | 30.0 | 40.8 | 23.9 | 10.7 | 12.0 |
| Bloomberg Commodity Index | 0.2 | 2.1 | 5.8 | -4.9 | 7.3 | 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.
BURGERNOMICS: A LOOK AT THE BIG MAC INDEX. During the first six months of 2025, the United States dollar delivered its worst performance since 1991. “The U.S. Dollar Index, which measures the value of the greenback against the world’s six most traded currencies, has lost almost 11 [percent] of its value…,” reported Valerio Baselli of Morningstar.8
The drop in the U.S. dollar’s value hasn’t made as big a difference as some might have expected – at least when it comes to buying burgers abroad.
Since 1986, The Economist has been using the “Big Mac Index” as a lighthearted way to measure the relative value of currencies across the world. In theory, if currency exchange rates are properly aligned, a burger should cost the same no matter where it is purchased. (This is known as purchasing-power parity.) That’s rarely the case, so the index helps identify which countries’ currencies are overvalued or undervalued.9
“Purchasing-power parity suggests that, with a Taiwanese Big Mac costing 78 Taiwanese dollars and an American one $6.01, the currencies’ exchange rate should be the ratio of the two prices. Hence $1 should buy NT$13 [new Taiwan dollars]. In reality, it buys NT$29. The Big Mac index therefore concludes that the Taiwanese dollar is greatly undervalued against the greenback, by some 56 [percent],” explained The Economist.10
In July 2025, The Economist updated the Index, comparing the price of a burger in the U.S. to the price overseas. (The price of a burger in the United States rose from $5.79 in January to $6.01 in July.10) After the decline in the U.S. dollar, currencies in many Asian countries remained significantly undervalued relative to the dollar. For example, a burger costs:9
- 49.8 percent less in Hong Kong than it does in the United States.
- 41.2 percent less in Japan than it does in the United States.
- 41.1 percent less in Indonesia than it does in the United States.
- 38.5 percent less in India than it does in the United States.
In contrast, a burger costs:9
- 54.7 percent more in Switzerland than it does in the United States.
- 39.0 percent more in Sweden than it does in the United States.
- 36.1 percent more in the Euro are than it does in the United States.
- 31.1 percent more in Britain than it does in the United States.
Overall, European countries have seen their currencies become more expensive when compared to the U.S. dollar, while currencies in China, Japan, Singapore, South Korea, Taiwan and Vietnam remain undervalued relative to the U.S. dollar. “Most are now even cheaper,” according to The Economist.10
WEEKLY FOCUS – THINK ABOUT IT
“Every individual… neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”11
― Adam Smith, Philosopher and economist
* 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://insight.factset.com/sp-500-earnings-season-update-august-1-2025
2 https://www.barrons.com/articles/stock-market-earnings-data-buy-sell-f3743245?mod=hp_LEDE_C_3 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-11-25-The-Stock-Market-Is-Stuck%20-%202.pdf
3 https://abcnews.go.com/Business/us-headed-recession-experts-weigh/story?id=124407347
4 https://www.bloomberg.com/news/articles/2025-08-01/us-manufacturing-contracts-at-fastest-pace-in-nine-months or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-11-25-US-Manufacturing-Contracts%20-%204.pdf
5 https://www.bloomberg.com/news/articles/2025-08-05/us-service-activity-nearly-stagnates-as-employment-contracts or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-11-25-US-Service-Activity%20-%205.pdf
8 https://global.morningstar.com/en-gb/markets/how-low-can-us-dollar-go
9 https://www.economist.com/interactive/big-mac-index or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-11-25-Our-Big-Mac-Index-Shows-How-Burger%20-%209.pdf
10 https://www.economist.com/finance-and-economics/2025/07/16/our-big-mac-index-will-sadden-americas-burger-lovers or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-11-25-Our-Big-Mac-Index-Will-Sadden%20-%2010.pdf
The Markets
Fast as a snail.
In July, the weather in Norfolk, England, was perfectly rainy as Bilbo Sluggins won the World Snail Racing Championship with a time of two minutes and 11 seconds. Fans and competitors traveled from the United States, South Korea, and France for the competition. Some arrived with trained gastropods (Training might include a strict lettuce diet and daily workouts climbing vertical surfaces). Others relied on entrants hired from the area’s world-renowned snail stables. Bilbo’s winning pace was just shy of the two-minute record set in 1995, but it was a vast improvement over 2023’s winning time of 7 minutes and 24 seconds.1,2,3
Over the first half of 2025, the U.S. economy grew at a middling pace. Last week, a deluge of economic data suggested it may be losing steam. Here’s what we saw:
- Economic growth moderated. The U.S. economy expanded faster than economists expected (3.0 percent annualized) from April through June. It was an improvement on the first three months of the year when the economy contracted (-0.5 percent annualized). Growth, as measured by gross domestic product (GDP), averaged about 1.25 percent over the first six months of the year, a slower pace than last year’s 2.8 percent.4
“Because swings in trade and inventories have distorted overall GDP this year, economists are paying closer attention to final sales to private domestic purchasers, a narrower metric of demand. This measure rose at a 1.2 [percent] pace in the second quarter, the slowest since the end of 2022,” reported Augusta Saraiva of Bloomberg.5
- Consumer prices rose. One of the Federal Reserve’s favored inflation gauges, the personal consumption expenditures price index, showed prices rising 2.6 percent year over year in June. That’s higher than the 2.4 percent increase in May. Core inflation, which excludes volatile food and energy prices, rose 2.8 percent year over year in June, in line with May’s numbers which were revised higher.6,7
“…while the higher tariffs aren’t expected to trigger an inflationary surge like Americans saw in 2022, the price hikes won’t be easy for everyone…It’s going to be uncomfortable for consumers…I think that they’re going to start to see it, and they’re going to notice that their paychecks aren’t going as far as they were,” opined an economist cited by Alicia Wallace of CNN Business.8
- Jobs growth slumped. The unemployment report created a bigger splash than usual. Fewer jobs were created (73,000) in July than economists had expected (115,000). In addition, revisions to May and June estimates were larger than normal. The number of jobs created in May dropped from 144,000 to 19,000, and June’s number dropped from 147,000 to 14,000. The baseline for a healthy level of job creation is 80,000 to 100,000 per month, according to a source cited by Megan Leonhardt of Barron’s.9,10
“While the size of May and June’s revisions was surprising, there are non-political reasons for the wide swings. Economists have warned for years that declining initial response rates from employers, for instance, could create more volatility within the employment data,” reported Leonhardt.11
Last week, major U.S. stock indexes moved lower, just as they did after last year’s July jobs report revisions. “Anyone who paid attention to markets last year will remember the August 2024 selloff, which was sparked by that year’s July jobs report. While last year’s report ultimately made the case for the Federal Reserve to cut interest rates by a half-point in September, the economy held steady and stocks eventually rebounded to fresh highs in the ensuing months,” reported Connor Smith of Barron’s.12
U.S. Treasuries rallied as softer economic data increased the likelihood of a Federal Reserve rate cut in September, reported Ye Xie, Michael Mackenzie, and Elizabeth Stanton of Bloomberg.13
Data as of 8/1/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -2.4% | 6.1% | 14.5% | 14.8% | 13.6% | 11.5% |
| Dow Jones Global ex-U.S. Index | -2.7 | 14.5 | 12.4 | 9.1 | 6.2 | 3.7 |
| 10-year Treasury Note (yield only) | 4.2 | N/A | 4.0 | 2.6 | 0.6 | 2.2 |
| Gold (per ounce) | 0.1 | 28.2 | 36.4 | 23.4 | 11.3 | 11.9 |
| Bloomberg Commodity Index | -2.8 | 1.9 | 5.3 | -5.7 | 7.6 | 1.1 |
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.
A SHIFT IN SENTIMENT. Sentiment has a profound influence on financial markets. When consumers are optimistic about their financial circumstances, they may spend more, lifting the economy. When they’re pessimistic, they spend less, dampening economic growth.14 Investor sentiment also affects markets. When investors are bullish, stock prices tend to rise. When they feel bearish, stock prices may fall.15 Over the past few weeks:
Investors were feeling bullish. The day before the employment report arrived last week, the latest AAII Investor Sentiment Survey showed bullish sentiment was greater than bearish sentiment. Investor optimism was fueled in part by strong company earnings reports. Last week, the net profit margin for companies in the Standard & Poor’s 500 Index was 12.3 percent for the second quarter. That’s above the five-year average of 11.8 percent, according to John Butters of FactSet. Together, S&P 500 companies have reported net profits above 12 percent for five consecutive quarters. 16,17,18
Investor confidence faltered last week. “America’s biggest companies are racing full speed ahead, but the economy could be headed for trouble. That’s not a great mix for the stock market, which suffered its worst week since May,” reported Avi Salzman of Barron’s.19
Consumer sentiment was mixed. Consumer sentiment ticked higher in July, according to the University of Michigan’s Index of Consumer Sentiment. While participants were more optimistic about current conditions, they were less optimistic about the future. “A rise in sentiment among stock holders was partially offset by a decline among consumers who do not own stocks… Although recent trends show sentiment moving in a favorable direction, sentiment remains broadly negative. Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025,” reported Surveys of Consumers Director Joanne Hsu.20
How are you feeling about the markets and the economy? Are you optimistic, pessimistic, or somewhere in between?
WEEKLY FOCUS – THINK ABOUT IT
“If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment.”21― Marcus Aurelius, Roman Emperor
* 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.economist.com/britain/2025/07/29/what-the-world-snail-racing-championships-says-about-rural-england or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-25-Economist-What-World-Snail-Racing-Championships%20-%201.pdf
4 https://www.bea.gov/sites/default/files/2025-07/gdp2q25-adv.pdf
5 https://www.bloomberg.com/news/articles/2025-07-30/us-economy-rebounds-with-3-gdp-growth-after-trade-reversal or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-25-Bloomberg-US-Economy-Expands-at-a-Moderate%20-%205.pdf
6 https://www.bea.gov/sites/default/files/2025-07/pi0625.pdf
7 https://www.bea.gov/sites/default/files/2025-06/pi0525.pdf
8 https://www.cnn.com/2025/07/31/economy/us-pce-consumer-spending-inflation-june
9 https://www.bls.gov/news.release/empsit.nr0.htm
10 https://www.barrons.com/livecoverage/july-jobs-report-data-today-news?mod=lc_navigation or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-25-Barrons-Shockingly-Weak-Job-Growth%20-%2010.pdf
11 https://www.barrons.com/articles/trump-orders-firing-bls-chief-cf0a8b86?mod=hp_SP_B_1_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-15-Barrons-Trump-Fires-BLS-Chief%20-%2011.pdf
12 https://www.barrons.com/livecoverage/stock-market-news-today-080125?mod=hp_LEDE_C_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-25-Barrons-Dow-Falls-540-Points%20-%2012.pdf
13 https://www.bloomberg.com/news/articles/2025-08-01/treasuries-jump-after-slower-job-growth-boosts-fed-cut-bets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-25-Bloomberg-US-Treasuries-Soar%20-%2013.pdf
14 https://www.investopedia.com/terms/c/consumer-sentiment.asp
15 https://www.investopedia.com/terms/m/marketsentiment.asp
16 https://www.aaii.com/sentimentsurvey
17 https://www.aaii.com/latest/article/323803-aaii-sentiment-survey-bullish-sentiment-makes-a-comeback
18 https://insight.factset.com/sp-500-reporting-net-profit-margin-above-12-for-the-5th-straight-quarter
19 https://www.barrons.com/articles/strong-earnings-stock-market-jobs-tariffs-c923d592?refsec=the-trader&mod=topics_the-trader or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-04-25-Barrons-Strong-Earnings-Cant-Save%20-%2019.pdf
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 20th 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]
[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