Current market environment performance of dynamic, risk-managed investment solutions.
By Daniel Poppe
Market snapshot
• Stocks: Stocks were higher last week.
• Bonds: The 10-year Treasury yield rose last week.
• Gold: Spot gold rose last week, closing above $3,300 an ounce.
• Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold and then bonds.
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Index summary
The major U.S. stock market indexes were up last week. The NASDAQ Composite returned 1.63%, the S&P 500 returned 1.75%, the Dow returned 2.34%, and the Russell 2000 returned 3.58%. The 10-year Treasury bond yield rose from 4.29% to 4.35%. Spot gold closed the week up 1.58%.
For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.
Stocks
The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.
Stocks continued to rise last week, shrugging off concerns about the next stage of President Trump’s tariff negotiations. The administration has said that countries will soon be notified of their new tariff levels if they fail to strike a trade agreement with the U.S., with implementation possible as early as August 1. The market may be rising on expectations that the announcement is merely a negotiating tactic and that the new tariff rates will not actually go into effect.
Second-quarter 2025 corporate earnings season is about to begin. Tariff levels have already risen somewhat this year, and this quarter’s reports may shed light on how much that has affected earnings. Investors will also be watching for signs of whether new AI technologies have improved corporate productivity.
The Atlanta Fed’s GDPNow estimate for second-quarter GDP growth is at 2.6%. That would be a significant improvement over the first quarter’s negative growth. However, the estimate has been trending lower in recent weeks. The first official estimate is scheduled for release on July 30.
Bonds
The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week above both its 50-day and 200-day moving averages.
Bond prices have generally risen in recent weeks following cooler inflation reports. However, some of those gains were pared last week after the Trump administration’s major spending and tax reform bill passed through Congress. Many bond investors may see the bill as adding to the federal deficit, potentially putting the U.S. on a more unsustainable fiscal path, leading to higher yields for the week.
The Federal Reserve’s next meeting is scheduled for July 30. Fed Chair Jerome Powell has had a historically tense relationship with President Trump, who has repeatedly called for rate cuts. So far, the Fed has held rates steady this year. The market believes that stalemate won’t change this month. Looking ahead, the market expects that a cut is more likely than not at the Fed’s September meeting.
Gold
The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week below its 50-day moving average but above its 200-day moving average.
Flexible Plan Investments (FPI) is the subadviser to the only U.S. gold mutual fund, The Gold Bullion Strategy Fund (QGLDX), designed at its introduction 11 years ago to track the daily price changes in the precious metal in a more tax-efficient manner than its ETF counterpart, GLD.
FPI’s indicators
The QFC S&P Pattern Recognition strategy’s primary signal started last week with a 0% exposure to the S&P 500. Exposure changed to 10% net short on Wednesday and to 40% net short on Thursday.
Our QFC Political Seasonality Index strategy was aggressive throughout last week. (Our QFC Political Seasonality Index is available—with all of the daily signals—post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)
The Volatility Adjusted NASDAQ strategy started the week with 60% net long exposure to the NASDAQ 100. Exposure changed to 80% net long on Tuesday and to 100% net long on Thursday.
The Systematic Advantage strategy held a 90% net long exposure to the S&P 500 throughout the week.
Our QFC Self-adjusting Trend Following strategy’s primary signal was 200% net long the NASDAQ 100 throughout the week.
The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and QFC S&P Pattern Recognition strategies can all employ leverage, so the investment positions may exceed 100%.
Our Classic model remained in stocks throughout last week. Most of our Classic accounts follow a signal that will allow the strategy to change exposure in as little as a week. A few accounts are on platforms that are more restrictive and can take up to one month to generate a new signal.
FPI’s Growth and Inflation measure is one of our Market Regime Indicators. It shows that we are in a Normal economic environment stage (meaning a positive monthly change in prices and a positive monthly change in GDP). Historically, a Normal environment has occurred 60% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Gold tends to outpace both stocks and bonds on an annualized return basis in a Normal environment but carries a substantial risk of a downturn in this stage.
Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 37% of the time since 2003. It is a stage of strong returns for stocks.