Earnings, Economic News, Interest Rates, AAII Sentiment and More

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 Economic News, Earnings, Interest Rates, AAII Sentiment and More. 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

Week in Review – Sensational Rebound from the Post-Liberation-Day Lows Continued

Volatility – Ups & Downs are Normal but Long-Term Trend has been Higher

Valuations – Attractive Metrics for Value Indexes and our Portfolios

EPS – Solid Corporate Profit Growth in 2025 and 2026 Remains the Expectation

Econ News – Mixed Stats, but Growth Still the Forecast

Interest Rates – At Least Three Fed Rate Cuts Over the Next 12 Months Now Expected

Sentiment – AAII Still in a Pessimistic Stance…Contrarian Positive

Stock News – Updates on twelve stocks across seven different sectors

Week in Review – Sensational Rebound from the Post-Liberation-Day Lows Continued

No doubt, news of a trade deal with Japan didn’t hurt, even as trade battles have not held back stocks since they became part of the Trump playbook dating back to 2018,

but the equity markets enjoyed another nice week, extending the massive rebound,

from the unofficial-Bear-Market lows (the average stock lost more than 20%, but not the S&P 500…on a closing basis) of early April,

Volatility – Ups & Downs are Normal but Long-Term Trend has been Higher

and offering the continued reminder that, despite significant downside volatility along the way,

including 27 official Bear Markets over the last century, the long-term trend in stocks is up.

Valuations – Attractive Metrics for Value Indexes and our Portfolios

Certainly, it has been a good year thus far for most asset classes and we can’t complain about how Value-oriented equity strategies have performed in 2025 and for much of the past two decades,

especially as valuations for the Value indexes are still inexpensive relative to interest rates,

while the metrics for our broadly diversified portfolios of what we believe are undervalued stocks are even more attractive.

EPS – Solid Corporate Profit Growth in 2025 and 2026 Remains the Expectation

And, as the much-lower forward-P/E ratios than the trailing P/E’s detailed in the table above show, the outlook for corporate profits remains healthy, with estimates for 2025 and 2026 from Standard & Poor’s rising in recent days,

as Q2 reporting season is off to a very good start. Indeed, 83.8% of companies that have announced results thus far have beaten expectations on the bottom line and the economic forecast remains decent as the Atlanta Fed is still projecting 2.4% real (inflation-adjusted) GPD growth for Q2.

Econ News – Mixed Stats, but Growth Still the Forecast

To be sure, the economic stats out last week were mixed, with both existing home sales,

and new home sales last month coming in below estimates,

as was the case for the preliminary July U.S. Manufacturing PMI from S&P Global.

On the other hand, S&P Global’s preliminary U.S. Services PMI for July was much better than forecast,

while durable goods orders excluding the volatile transportation sector for June edged past estimates,

and first-time filings for unemployment benefits in the latest week dropped to 217,000, near multi-generational lows.

Yes, the important forward-looking index of leading economic indicators (LEI) fell 0.3% in June, but that was in line with estimates and the keeper of the gauge is suggesting no recession is on the horizon, with 1.6% real GDP growth now projected this year,

which would be a little better than the Federal Reserve’s 1.4% forecast from six weeks ago.

Interest Rates – At Least Three Fed Rate Cuts Over the Next 12 Months Now Expected

And speaking of the Fed, Jerome H. Powell & Co. convene again this week, but the betting markets do not expect a rate cut this time around, though the futures are suggesting we will have as many as two 25-basis-point reductions in the Fed Funds rate by year end and more than three reductions by this time next year.

All things equal, lower interest rates should make stocks more attractive, but seven decades of market history shows that equities have performed well, no matter if the Fed is easing or tightening monetary policy.

And since equities have performed well over the long-term, despite plenty of disconcerting events on the global stage,

we constantly remind that the longer stocks are held the less the chance of loss,

Sentiment – AAII Still in a Pessimistic Stance…Contrarian Positive

but our admonition does not seem to reach all of Main Street as so many individual investors continue to think they can time the markets,

even as nearly four-decades of evidence shows that we should be greedy when others are fearful!

Stock News – Updates on twelve stocks across seven different sectors

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.