Riding the Wave of Resilience

For the week ended 7/26/2025.

Despite a backdrop of global uncertainty of trade tensions, international friction, and the usual theatrics out of Washington, the U.S. economy continues to hum along like a well-caffeinated barista. July’s Composite PMI came in at a robust 54.6, marking the fastest pace of private sector expansion this year. For the uninitiated, any reading above 50 means businesses are doing more, not less. And that, friends, is a good thing.

Across the pond, Europe is also showing surprising fortitude. Inflation has eased more sharply than in the U.S., and thanks to a weaker dollar and surging defense and infrastructure spending, European equities are punching above their weight.

Back home, corporations – particularly the big dogs – are still absorbing higher import costs rather than passing them on to consumers. That act of generosity (or savvy market positioning) won’t last forever, but for now, it’s helping keep inflationary pressure in check.

And the markets? Still partying like it’s 2021. The S&P 500 notched its ninth record close this month, rising 1.5% for the week. Foreign shares matched that, while bonds added 40 basis points and even good ol’ cash kicked in 10. Commodities, however, were the wallflower at the dance, slipping 1.5%.

So far in 2025, foreign equities are leading the pack, up 20.6%, with the U.S. trailing at 9.4%. Bonds and cash are tagging along at 3.6% and 2.4%, respectively. And over the past 12 months, it’s a dead heat: U.S. and foreign stocks are both up a clean 20%.

Plenty of data on tap this week: July’s Consumer Confidence (Tuesday), Q2 GDP (Wednesday), and the all-important July unemployment report (Friday). Should be a busy one.

With that, enjoy your coffee, your markets, and your moment of calm before the data storm.

Interesting data point of the week.

Source: Visual Capitalist

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