The first half of 2025 was busy and eventful, but for all that happened, markets ended the first half not far from where they started the year. The S&P 500 returned 6.1% through the end of June after being down by over 15% at one point in April. Long-term interest rates, as measured by the 30-year U.S. Treasury bond yield, ranged from 4.40% to 5.10% but ended the first half of the year right where it started, near 4.80%. If one did not follow the markets closely, it might seem as though little had changed.
Market Commentary 8/15/24
Stocks fell hard on Monday of last week, with the S&P 500 closing down 3%. However, a better-than-expected jobs report on Thursday, which saw weekly initial jobless claims fall to 233,000 from 250,000 the week before, led to the S&P 500 rallying 2.3%. This rally was the biggest gain in nearly two years, and the rebound resulted in the S&P 500 being basically flat for the week.
As we have mentioned in previous commentaries, the many variables facing investors have led to volatile markets. Indeed, the CBOE Volatility Index, a well-referenced measure of market uncertainty, spiked to a high of 65 on Monday before returning to the low 20s at the end of the week. For comparison, throughout the month of July, this Index was in the mid-teens. Monday’s market decline was attributed to an unwinding of the “Yen-carry trade.”
The Yen-carry trade is a trading strategy used by hedge funds and other institutional investors that involves borrowing Japanese Yen at a low interest rate and using the funds to invest in assets that offer a higher return. This strategy capitalizes on the interest rate differential between Japan and other countries, aiming to generate profits from the difference in interest rates.
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Q2 2025 Quarterly Market Commentary
The first half of 2025 was busy and eventful, but for all that happened, markets ended the first half not far from where they started the year. The S&P 500 returned 6.1% through the end of June after being down by over 15% at one point in April. Long-term interest rates, as measured by the 30-year U.S. Treasury bond yield, ranged from 4.40% to 5.10% but ended the first half of the year right where it started, near 4.80%. If one did not follow the markets closely, it might seem as though little had changed.