June 2025 Investylitics

Horizon Advisor Network Investment Committee June 9, 2025

 The Horizon Advisor Network Investylitics Committee members met on Monday, June 9th, in the afternoon. Despite being spread across the country, many committee members were able to gather at our broker-dealer conference last week in Whistler, British Columbia. During that time, we heard the latest thoughts on the markets and the economy from Cetera's Chief Economist Gene Goldman.

 After three consecutive months of losses, markets surprised to the upside in May, with the S&P 500 and Nasdaq Composite turning in their best monthly performances since November of 2023. As you can see in our first chart below, this was the best May for U.S. stocks in 35 years, since 1990. It was also the second-best May for U.S. stocks in 75 years. From a historical standpoint, the remainder of the year has produced strong positive results following outsized gains in May. (We would like to remind you that past performance does not guarantee future results.)

Very few economists, market strategists, or clients would have predicted or expected such strong returns following the Liberation Day trade and tariff announcements from the Trump administration on April 2nd. As you can see in our second chart below, the markets have recovered approximately 90% of their losses since the S&P 500’s all-time high was reached on February 19th of this year. The index is also significantly above where it stood on the day of the tariff announcements and subsequent sell off. This should serve as a strong reminder not to try to time the financial markets or let political concerns drive your short-term investment decisions.

Stocks have been buoyed by a surprise tariff de-escalation agreement between the U.S. and China, creating hope that global trade tensions and policy uncertainty might ease heading into the summer. There is a potential for further geopolitical and economic pressures to subside if additional deals with major trade partners are completed and/or the 2017 tax cuts are extended into the future through Congress's budget reconciliation process. Just as political and economic uncertainty drove markets down in March and April of this year, removing this uncertainty has the potential to drive markets higher in the future.

 Additionally, resilient corporate earnings, strong AI tailwinds, and improving consumer sentiment contributed to investor optimism. We also received better than expected readings from both the unemployment and inflation reports. The unemployment rate remained unchanged at 4.2% in May 2025. This rate has been within a narrow range of 4.0% to 4.2% since May 2024. Total non-farm payroll employment increased by 139,000 in May, exceeding expectations. At the same time, despite widespread concerns that trade and tariff issues would raise prices for consumers, inflation has continued to moderate toward the Federal Reserve Bank's 2% target.

 This has led to additional strength in several of the economic indicators tracked by ClearBridge on their recession risk dashboard. As you can see in our final chart below, both truck shipments and the yield curve indicators have improved over the last couple of months. This leaves their overall recession indicator in expansion territory, which bodes well for near-term economic growth. Confirming this outlook, the latest Atlanta Fed GDPNow tracker is projecting GDP growth for the second quarter of the year at 3.8% as of June 9th. This would represent a strong rebound from the first-quarter number, which was depressed by an increase in imports in anticipation of higher tariffs.

Given the continued uncertainty for both the economy and the geopolitical outlook, the committee believes that maintaining a diversified portfolio, aligned with your financial plan and personal goals, is the best course of action moving forward. Despite U.S. stocks being one of the best-performing asset classes over recent years, we have seen other categories, including developed and emerging market stocks, bonds, and gold, have contributed to portfolio performance this year. Staying diversified and rebalancing portfolios regularly has proven to be a wise strategy over time.

 The committee continues to appreciate your trust in our team and our process. We continue to closely monitor the economic and financial backdrop and stand ready to make adjustments to our model portfolios as needed. As always, we are here for you if you have questions about your unique financial situation. Please do not hesitate to reach out if we can help. Have a great day.

The views stated in this piece are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities. Due to volatility within the markets, 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.

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.

A diversified portfolio does not assure a profit or protect against loss in a declining market.

Re-balancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional.

Sincerely,

Jesse W. Hurst, CFP®, AIF®
Senior Financial Planner and CEO

*Award Recipient Jesse Hurst 

Forbes: Best-in-State Wealth Advisors Award received by Jesse Hurst, Senior Wealth Advisor, (2018-2024). The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative data, rating thousands of wealth advisors with a minimum of seven years’ experience and weighing factors like revenue trends, assets under management, compliance records, industry experience, and best practices learned through telephone and in-person interviews. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings. Research summary as of April 2024: - 44,990 nominations received, based on thresholds - 23,876 invited to complete online survey - 20,412 telephone interviews - 4,926 in-person interviews at Advisor's location - 1,507 virtual interviews. Listing in this publication and/or award is not a guarantee of future investment success. This recognition should not be construed as an endorsement of the advisor by any client. No compensation was provided directly or indirectly by the recipient for participation or in connection with obtaining or using the third-party rating or award.

¹ This recognition and the due–diligence process conducted are not indicative of the advisor's future performance. Your experience may vary. Winners are organized and ranked by state. Some states may have more advisors than others. You are encouraged to conduct your own research to determine if the advisor is right for you. 

² Portfolio performance is not a criterion due to varying client objectives and lack of audited data. SHOOK does not receive a fee in exchange for rankings.