CIO Monthly Observations - August 2025
Markets in Review
The S&P rose for a third month in a row, up 2.2% in July, which brings its year-to-date return to 7.8%. The MSCI All Country World index also rose, up 1.3% during the month and its year-to-date gains are now 10.5%. The Bloomberg U.S. Aggregate Bond index, on the other hand, fell 0.25% in July, which reduced its year-to-date return to 3.75%.
July was an extremely busy month for trade deals as the July 9th deadline was extended to August 1st in order to maximize the amount of time to finalize negotiations. The tactics have worked as the European Union and Japan agreed to deals this month. Mexico asked for and was granted an additional extension and Canada has yet to strike a deal with the US, but those countries plus China (which has its own extension) represent the vast majority of imports for the United States.
Monthly Highlights
The U.S. reached a trade deal with the European Union
The Federal Reserve kept interest rates steady because of inflation
Japan struck a trade deal with President Trump, which will include investments in the U.S.
News in Review
The United States signed an historic trade deal with the European Union, a trading bloc of 27 countries. As part of the deal, the EU will buy $750 billion of energy from and invest $600 billion into the United States. There will also be a 15% tariff rate for all goods that are imported from the EU, including semiconductors, pharmaceuticals and cars.
Israel bombed a number of key nuclear sites in Iran in what they said was an attempt to reduce the threat of Iran developing a nuclear weapon. Iran has said that Israel violated international law and the UN Secretary-General said the strikes were a “dangerous escalation”. Subsequently Iran retaliated against Israel and killed two dozen people and wounded hundreds of others, before a cease-fire was declared.
Trump Strikes Trade Deal with Japan
Japan agreed to a deal with President Trump where imports will be charged a 15% tariff instead of the 25% rate, which was originally scheduled to take effect on August 1st. The Japanese also agreed to invest $550 billion into the US economy as part of the agreement. This deal is in addition to the trade deals the United States has already made with the United Kingdom, Vietnam and the Philippines.
Largest Piece of Mars on Earth Fetches $5.3 million at Auction
A meteorite that was discovered in Africa sold for over $5 million in New York. It is believed to have been blown off the surface of Mars by a massive asteroid strike and is the most valuable meteorite ever sold at auction, according to Sotheby’s, which handled the sale. It is 54 pounds and 70% larger than the next largest piece of Mars that has ever been found on Earth.
DISCLOSURES
Securities offered through LPL Financial, Member FINRA/SIPC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial. This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non- financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices. MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set. Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage- backed and asset-backed securities. Please note this newsletter contains hyperlinks to additional content. The information being provided is strictly as a courtesy. We make no representation as to the completeness or accuracy of information provided by these websites.
