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An Alternative To Money Market Funds
July 2025

MARKET OVERVIEW
June continued the market’s strong rebound after a very difficult month of April. That strength has carried over into early July. Due to the 4th of July falling on a Friday this year, the trading week ended on July 3. At the close of trading on July 3, the Dow Jones Industrial Average was up 5.37% year to date, while the S&P 500 was up 6.76% and the Nasdaq was up 6.68%, year to date.

Some items of note: Qualcomm will acquire London based Alphawave Semi,  Chart Industries and Flowserve agreed to merge, AMD acquired Software firm Brium, Insmed surged over 25% on news it had positive results for its hypertension treatment, Casey’s General Stores jumped on better than expected quarterly results along with a 14% increase in its quarterly dividend, Disney and Comcast finally agreed on a price, thus enabling Disney to take full control of Hulu, Paramount announced another round of layoffs, Google has offered buyouts to a number of employees in an effort to reduce costs and headcount, Chime Financial had a fantastic IPO as it surged over 60% on day 1 from its initial pricing of $27/share, Jabil jumped 12% recently after lifting its full year guidance, Circle had an amazing IPO as it traded up to nearly $300/share after pricing at $31/share. Home Depot won the takeover battle for GMS after offering $110/share in cash for all of GMS shares. Finally, the US is now over $37 trillion in debt

ECONOMIC SUMMARY
Thursday’s Nonfarm Payroll Report was stronger than forecast as 147,000 jobs were added versus the estimate of 110,000. The unemployment rate dipped to 4.1% marking the 14th straight month the rate has been at 4% or higher. The jobs figures for April and May were revised higher by a combined 16,000 jobs. Meanwhile, the U-6 rate dipped slightly to 7.7%. Average Hourly Earnings rose by 3.7% year over year, in line with the forecast. In addition, the closely watched Labor Participation Rate fell slightly to 62.3% in April. The next Nonfarm Payroll Report is scheduled to be released on Friday, August 1..

FEDERAL RESERVE
The Fed kept rates steady at its meeting back on June 17-18. The economy remains strong, as evidenced by last week's employment report. So, there does not appear to be a reason to provide added stimulus to the economy. So, it is doubtful the Fed will  be cutting interest rates when the Fed meets on July 29-30. Meanwhile, the central banks of the European Union, Canada and the United Kingdom have all cut rates at their most recent meetings while the Fed has stood pat. Fed Chairman Powell has indicated rates might have been cut sooner in the US if not for the concern about the impact of tariffs on inflation. But, oil prices have moved lower  which should help ease any inflation pressure.

STOCKS TO WATCH
Last month, America’s largest banks all passed their respective stress tests overseen annually by the Federal Reserve. On average, the Fed’s stress tests found that these banks retained on average an 11.6% ratio of their common equity Tier 1 capital. This figure is well above the 4.5% minimum required by the Federal Reserve.

As a result, these banks are rewarding their shareholders with dividend increases and stock buybacks. Goldman Sachs is raising its quarterly dividend by 33% to $4/share. JP Morgan is raising its quarterly dividend by 7% to $1.50/share along with a new $50 billion stock buyback program. Meanwhile, Bank of America will raise its quarterly dividend by 8% to 28c/share and Wells Fargo will raise its quarterly dividend 12.5% to 45c/share. Finally, Morgan Stanley will increase its quarterly dividend by 11% to $1/share and also announced a new $20 billion share repurchase program. As interest rates move lower and the economy improves on the heels of Pres. Trump’s “Big Beautiful Bill” passage, it is likely we will see a number of dividend increases and stock buyback announcements by these banks going forward.

My weekly radio show is on holiday and should return soon on WWPR 1490 AM. My prior radio shows and newspaper columns are archived here.

If you are unhappy with the returns now offered by money market funds, feel free to contact us. As of July 5, our fund is up over 17% for 2019.

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