Stock and GDP Outlook, for Week Ending 06/27/2025
Rising Risks to Stocks and the Economy
Stock prices and the mean expected NGDP growth rate fell again last week, largely due to the escalation of airstrikes on Iran. The war escalated further this weekend, as the US joined the bombing campaign to try to degrade Iran’s nuclear program.
Both oil prices and inflation expectations rose, with the former presumably causing at least some of the latter. Inflation expectations are essentially at the Fed’s target. This fact, coupled with the new negative supply shock means it’s even more likely that stock prices will not rise much in the near-term, and there’s obviously an elevated risk for more negative shocks. Hence, caution is warrented right now for stock investors.
PS: This week’s post is rather short, both because the outlook for stocks and the economy haven’t changed much since last week except for the esclation of the war with Iran, and because I am dealing with severe illness due to shingles. I will be writing more in-depth posts s I recover.
Note: This post, as is the case with all my posts, should not be construed as offering investment advice. Such advice should be tailored to the individual investor by qualified professionals who, ideally, are fiduciaries.
Links to Data:
Economic Data Sources:
https://fred.stlouisfed.org/series/SP500
https://www.wsj.com/market-data/stocks/peyields
https://www.barchart.com/futures/quotes/ES*0/futures-prices
https://ycharts.com/indicators/sp_500_earnings_per_share_forward_estimate#:~:text=Basic%20Info-,S&P%20500%20Earnings%20Per%20Share%20Forward%20Estimate%20is%20at%20a,28.27%25%20from%20one%20year%20ago.
https://www.cnbc.com/quotes/.VIX
https://fred.stlouisfed.org/series/DTWEXBGS
https://fred.stlouisfed.org/graph/?g=Ee9i
https://fred.stlouisfed.org/series/T10Y3M#0
https://fred.stlouisfed.org/series/DGS10
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
https://tradingeconomics.com/commodity/crb?user=nunote
https://www.cnbc.com/quotes/@CL.1
https://www.cmegroup.com/trading/en
https://www.spglobal.com/spdji/en/documents/additional-material/sp-500-eps-est.xlsx
https://www.cmegroup.com/markets/interest-rates/stirs/30-day-federal-fund.quotes.html