A Strong Second Quarter, with a Shaky Start

Jul 3, 2025

With June behind us, the second quarter is officially in the books.

It began on shaky ground, as tariff announcements on Liberation Day rattled markets early on. But once those plans were, let’s say, “reworked,” the quarter ended with strong gains across the board:

  • U.S. Stocks: +10.9%
  • International Stocks: +12.1%
  • U.S. Bonds: +1.2%
  • International Bonds: +2.1%

Below, you’ll find a few data points and observations from the past month—touching on markets, real estate, and the intersection of the job and AI.

Thanks for reading.

Investing / Stock Market
  • The next quarter is higher 85% of the time and two quarters later stocks are higher 85% of the time. Another clue the rest of ’25 could be a good one.” — Ryan Detrick
  • 💸 Low Dividend Yields – “The S&P 500’s Dividend Yield has moved down to 1.25%, the lowest since 2000.” — Charlie Bilello
  • 🌎 Mixed IPO Market – “93 U.S. companies have priced offerings this year, up 45% from the same time last year.”
  • “IPO volume may be rising, but many of the strongest companies, like SpaceX, ByteDance, and Stripe, are still staying private.” — Scott Galloway
  • 🔥 Earnings Growth – “The ‘Magnificent 7’ stocks [Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla] delivered 28% year-over-year earnings growth,” far outpacing the other companies. — Michael Cembalest
  • 📊 Mag 7 Performance – Despite the strong earnings growth from these companies, their returns this year are all over the place:
  • I recommend saving at least 15% of your income. Luckily, Americans are getting close to that, saving an average of 14.3% of their income in their 401(k)’s, up from 13.5% in 2020. 
Real Estate
  • 🏠 Not Many First-Time Home Buyers – “With mortgage rates close to 7% and home prices at all-time highs, the share of first-time home buyers as a share of all houses sold has declined from 50% in 2010 to only 24% today.” — Torsten Slok
  • Lots of Homes For Sale – “There are now over 500k new homes for sale in the US, the most since November 2007.”
  • “The primary reason for rising inventories is the same as back then: a lack of affordability causing demand to plummet.” — Charlie Bilello

Jobs / AI

  • 💸 Layoffs Increasing – So far this year, ~700k people have been laid off, an 80% increase from the same period last year.
  • Tech Jobs are Hard to Find – “…an absolutely brutal job market for the US tech industry, which is back to losing jobs year-on-year after several months of tepid positive growth.” — Joey Politano
  • A few quotes about AI and the job market:
      • “About one in five S&P 500 companies have fewer employees today in both offices and the field than a decade ago.” — WSJ
      • “​​As we roll out more Generative AI and agents, it should change the way our work is done. It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce.” — Andy Jassy, CEO of Amazon
      • “What the hyperscalers [Amazon, Google, Microsoft, etc.] are doing, I would describe…I know we’re only 25 years into the century…but this is the bet of the century. That you can spend this much on AI infrastructure, depress your cash flow…and wait for the ultimate payoff” — Michael Cembalest, Chair of Market and Investment Strategy, JP Morgan Chase

Quote of the Month

“There are times when chasing the things money can buy, one loses sight of the things which money can’t buy and are usually free.”

– John Paul Rathbone

I hope you found these interesting.

As always, please reach out if you have any questions or would like to connect.

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Past performance is no guarantee of future returns.

The graphs and charts in this commentary are for illustrative purposes only and not indicative of any actual investment. Index returns do not reflect any fees, expenses, or sales charges. It is not possible to invest directly in an index. Stocks are not guaranteed and have been more volatile than other asset classes. Historical returns were the result of certain market factors and events which may not be repeated in the future. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgement in determining whether investments are appropriate for clients.

This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities.

Disclaimer: Investments are not guaranteed and are subject to investment risk, including possible loss of the principal amount invested. Past performance is no guarantee of future results. All allocations and opinions expressed are as of the date of this presentation and subject to change. The information contained herein does not constitute investment advice or a solicitation. Information obtained from 3rd parties is believed to be accurate, but has not been independently verified.

The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Think Different Financial Planning cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Think Different Financial Planning does not provide tax or legal advice, and nothing contained in these materials should be taken as such. As always please remember investing involves risk and possible loss of principal capital. Advisory services are only offered to clients or prospective clients where Think Different Financial Planning and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Think Different Financial Planning unless a client service agreement is in place.