Market Commentary | Jul 14, 2025
2Q2025 Market Commentary: At the Crossroads
Michael J. AroestyCFP®
CFP®
“You cannot tell from appearances how things will go. Sometimes imagination makes things out far worse than they are; yet without imagination, not much can be done. Those people who are imaginative see many more dangers than perhaps exist, certainly many more than will happen; but then they must also pray to be given that extra courage to carry this far-reaching imagination.”
- Winston Churchill, Speech to the Harrow School in 1941
Following the conclusion of Nazi Germany’s “Blitz” over Great Britain in 1941, Winston Churchill delivered one of his most famous speeches, “Never Give In, Never, Never Never.” While those inspirational words live on, lesser known are the two preceding lines above, in which Churchill described catastrophizing – the propensity to jump to the worst-case outcome and overestimate its probability. Many Britons, Americans, and those across occupied Europe succumbed to this thinking at the height of the Blitz (full speech here).
During the second quarter of 2025, the US placed the highest tariff rates on its trading partners since 1930, Europe remained engulfed in the largest ground war since World War II, and the long-feared direct military confrontation between Israel, Iran, and the United States finally exploded. If one imagined this situation in January, what would one’s imagination have conjured for the market’s response? Very likely, this scenario would be accompanied by predictions of a worst-case outcome – rocketing oil prices, inflation, stalling growth, and wider war. In fact, many pundits predicted these outcomes just a few weeks ago.
Instead, in July the US stock market hit a new all-time high.
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Michael J. Aroesty
CFP®