The Prudent Speculator Weekly Commentary is expertly curated every week as a valuable resource for stock market news, investing tips, business insights, and economic trends as it relates to value stock investing. In this week’s Market Commentary, we discuss Bear Markets, Tariffs, Valuations and more Stock News. We also include a short preview of our specific stock picks for the week, the entire list is available only to our community of loyal subscribers.
Executive Summary
Newsletter Trades – 10 Purchases Across 4 Portfolio
Sentiment – After 25%+ Rebound, AAII Finally Registers More Bull than Bear…And Stocks Fall
Bear Markets – 27 Official 20% Declines since 1927 Volatility, and an Unofficial One in April
Tariffs – History Shows Stocks Have Gained Over the Long-Term Despite Duties
EPS – Corporate Profit Growth in 2025 and 2026 Remains the Expectation
Econ News – Growth Still the Forecast
Fed – Rate Cuts Still Expected This Year and Next
Valuations – Attractive Metrics for Value Stocks
Wall of Worry – Always Something to Fret About, but Long-Term Trend has been Higher
Stock News – TPS Winners & Losers Since Liberation Day
Sentiment – After 25%+ Rebound, AAII Finally Registers More Bull than Bear…And Stocks Fall
It was a lousy start and end to the first full trading week of July, perhaps not so coincidentally tying in with the good folks at the American Association of Individual Investors (AAII) finally becoming more Bullish than Bearish,
after, and NOT before, stocks had enjoyed a massive rebound of more than 25%,
Bear Markets – 27 Official 20% Declines since 1927 Volatility, and an Unofficial One in April
from the post-Liberation-Day, Bear-Market lows.
Obviously, the numbers in the table above “prove” that the average stock endured a Bear Market this year, while we know that even CNBC Television confirmed the occurrence of a 20% drop on an intra-day basis on April 7,
Tariffs – History Shows Stocks Have Gained Over the Long-Term Despite Duties
but we realize that the history books only count official Bear Markets (27 of them for the S&P 500 since 1927) on a closing basis, which makes perfect sense as one cannot trade stocks when the market is open and one can trade when it is closed…oh wait!
To be sure, the historical evidence shows that while AAII is a contrarian gauge suggesting investors should be greedy when others are fearful, the numbers tell us we should simply be less greedy when others are not fearful,
so we will have to attribute the modest pullback endured last week to fresh worries about trade, with President Trump issuing new tariff proclamations for South Korea, Japan, Brazil, Canda and numerous other countries, with August 1 implementation dates. Mexico and the European Union were targeted with new levies post market close on Friday, and the equity futures were heading south on Sunday evening, suggesting a tough start to the new trading week. Of course, we can’t forget that tariffs have long been part of the Trump playbook,
not to mention nearly every prior administration,
EPS – Corporate Profit Growth in 2025 and 2026 Remains the Expectation
yet the major equity market averages sit within earshot of all-time highs as corporations have navigated through all prior headwinds, with profits growing handsomely through the years and forecasts calling for continued earnings growth over the balance of 2025 and 2026,
Econ News – Growth Still the Forecast
due in large part to the stellar long-term growth of the U.S. economy, despite a few bumps in the road along the way.
No doubt, the health of the economy is a big question mark, especially with the tariff uncertainty, but the stats out last week, including the June read on small business optimism coming in as expected,
and first-time filings for unemployment benefits in the latest week falling to 227,000, below estimates of 235,000,
Fed – Rate Cuts Still Expected This Year and Next
did little to change the projections for OK real (inflation-adjusted) near-term GDP growth.
True, there is also uncertainty about Jerome H. Powell & Co.’s approach to monetary policy, but the betting odds in the Fed Funds futures market continue to suggest two 25-basis-point cuts in interest rates are in the cards this year, with four cuts likely over the next 12 months,
though history confirms that, on average, stocks haven’t minded whether the Federal Reserve is tightening or easing.
Valuations – Attractive Metrics for Value Stocks
That said, lower interest rates are better from a valuation perspective for equities, all else equal, even as Value Stocks are still reasonably priced today, in our view, versus the current 10-Year U.S. Treasury Yield of 4.41%.
And valuation is another reason we find Value stocks very appealing these days, as the Russell 3000 Value index trades much closer than its Growth counterpart to the mean levels over the last 30 years on a Price to Earnings basis,
as well as Price to Sales,
and Price to Book Value,
despite Value having enjoyed nice returns over the last two decades,
and since the launch of The Prudent Speculator more than 48 years ago.
Wall of Worry – Always Something to Fret About, but Long-Term Trend has been Higher
Yes, anything can happen in the short run, and there have been plenty of disconcerting headlines just since the end of the Great Financial Crisis in 2009, so we must always be braced for downside volatility. Still, we see no reason for long-term-oriented investors to not be optimistic about the prospects for stocks going forward, especially as every prior scary event has been overcome in the fullness of time.
Stock News – TPS Winners & Losers Since Liberation Day
Keeping in mind that all stocks are rated as a “Buy” until such time as they are a “Sell,” a listing of all current recommendations is available for download via the following link:
https://theprudentspeculator.com/dashboard/. We also offer the reminder that any sales we make for our newsletter strategies are announced via our
Sales Alerts. Jason Clark, Chris Quigley and Zack Tart take a look at earnings reports and other market-moving news of note out last week for more than a few of our recommendations.
Kovitz Investment Group Partners, LLC (“Kovitz”) is an investment adviser registered with the Securities and Exchange Commission. This report should only be considered as a tool in any investment decision and should not be used by itself to make investment decisions. Opinions expressed are only our current opinions or our opinions on the posting date. Any graphs, data, or information in this publication are considered reliably sourced, but no representation is made that it is accurate or complete and should not be relied upon as such. This information is subject to change without notice at any time, based on market and other conditions. Past performance is not indicative of future results, which may vary.
Bear Markets, Tariffs, Valuations and more Stock News
The Prudent Speculator Weekly Commentary is expertly curated every week as a valuable resource for stock market news, investing tips, business insights, and economic trends as it relates to value stock investing. In this week’s Market Commentary, we discuss Bear Markets, Tariffs, Valuations and more Stock News. We also include a short preview of our specific stock picks for the week, the entire list is available only to our community of loyal subscribers.
Executive Summary
Newsletter Trades – 10 Purchases Across 4 Portfolio
Sentiment – After 25%+ Rebound, AAII Finally Registers More Bull than Bear…And Stocks Fall
Bear Markets – 27 Official 20% Declines since 1927 Volatility, and an Unofficial One in April
Tariffs – History Shows Stocks Have Gained Over the Long-Term Despite Duties
EPS – Corporate Profit Growth in 2025 and 2026 Remains the Expectation
Econ News – Growth Still the Forecast
Fed – Rate Cuts Still Expected This Year and Next
Valuations – Attractive Metrics for Value Stocks
Wall of Worry – Always Something to Fret About, but Long-Term Trend has been Higher
Stock News – TPS Winners & Losers Since Liberation Day
Sentiment – After 25%+ Rebound, AAII Finally Registers More Bull than Bear…And Stocks Fall
It was a lousy start and end to the first full trading week of July, perhaps not so coincidentally tying in with the good folks at the American Association of Individual Investors (AAII) finally becoming more Bullish than Bearish,
after, and NOT before, stocks had enjoyed a massive rebound of more than 25%,
Bear Markets – 27 Official 20% Declines since 1927 Volatility, and an Unofficial One in April
from the post-Liberation-Day, Bear-Market lows.
Obviously, the numbers in the table above “prove” that the average stock endured a Bear Market this year, while we know that even CNBC Television confirmed the occurrence of a 20% drop on an intra-day basis on April 7,
Tariffs – History Shows Stocks Have Gained Over the Long-Term Despite Duties
but we realize that the history books only count official Bear Markets (27 of them for the S&P 500 since 1927) on a closing basis, which makes perfect sense as one cannot trade stocks when the market is open and one can trade when it is closed…oh wait!
so we will have to attribute the modest pullback endured last week to fresh worries about trade, with President Trump issuing new tariff proclamations for South Korea, Japan, Brazil, Canda and numerous other countries, with August 1 implementation dates. Mexico and the European Union were targeted with new levies post market close on Friday, and the equity futures were heading south on Sunday evening, suggesting a tough start to the new trading week. Of course, we can’t forget that tariffs have long been part of the Trump playbook,
not to mention nearly every prior administration,
EPS – Corporate Profit Growth in 2025 and 2026 Remains the Expectation
yet the major equity market averages sit within earshot of all-time highs as corporations have navigated through all prior headwinds, with profits growing handsomely through the years and forecasts calling for continued earnings growth over the balance of 2025 and 2026,
Econ News – Growth Still the Forecast
due in large part to the stellar long-term growth of the U.S. economy, despite a few bumps in the road along the way.
No doubt, the health of the economy is a big question mark, especially with the tariff uncertainty, but the stats out last week, including the June read on small business optimism coming in as expected,
and first-time filings for unemployment benefits in the latest week falling to 227,000, below estimates of 235,000,
Fed – Rate Cuts Still Expected This Year and Next
did little to change the projections for OK real (inflation-adjusted) near-term GDP growth.
True, there is also uncertainty about Jerome H. Powell & Co.’s approach to monetary policy, but the betting odds in the Fed Funds futures market continue to suggest two 25-basis-point cuts in interest rates are in the cards this year, with four cuts likely over the next 12 months,
though history confirms that, on average, stocks haven’t minded whether the Federal Reserve is tightening or easing.
Valuations – Attractive Metrics for Value Stocks
That said, lower interest rates are better from a valuation perspective for equities, all else equal, even as Value Stocks are still reasonably priced today, in our view, versus the current 10-Year U.S. Treasury Yield of 4.41%.
And valuation is another reason we find Value stocks very appealing these days, as the Russell 3000 Value index trades much closer than its Growth counterpart to the mean levels over the last 30 years on a Price to Earnings basis,
as well as Price to Sales,
and Price to Book Value,
despite Value having enjoyed nice returns over the last two decades,
and since the launch of The Prudent Speculator more than 48 years ago.
Wall of Worry – Always Something to Fret About, but Long-Term Trend has been Higher
Yes, anything can happen in the short run, and there have been plenty of disconcerting headlines just since the end of the Great Financial Crisis in 2009, so we must always be braced for downside volatility. Still, we see no reason for long-term-oriented investors to not be optimistic about the prospects for stocks going forward, especially as every prior scary event has been overcome in the fullness of time.
Stock News – TPS Winners & Losers Since Liberation Day
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