Market index returns

Month to date since July 09, 2025 as of July 16, 2025

Index definitions: Global Real Estate = FTSE EPRA/NAREIT Developed Index; Global Infrastructure = Dow Jones Brookfield Global Infrastructure Index; Natural Resource Equities = S&P Global Natural Resources Index; Commodity Futures = Bloomberg Commodity Index; TIPS = Barclays US TIPS Index; Global Equities = MSCI World Index; Real Assets Index = 30% FTSE EPRA/NAREIT Developed Index, 30% Dow Jones Brookfield Global Infrastructure Index; 15% S&P Global Natural Resources Index; 15% Bloomberg Commodity Index, 10% Barclays TIPS Index. Source: Bloomberg, DWS. Past performance is not indicative of future results. It is not possible to invest directly in an index.

Market commentary:

Equities paused their meteoric rise from lows made mid-April following “Liberation Day” concerns. It was back to the future as the U.S. administration announced a 25% levy on products from South Korea and Japan, as well as a 50% tariff on copper imports.  Discerning whether tariffs rates are strategic vs negotiable has become increasingly clear as the administration views copper production in the US as strategic while county tariffs are typically used to accelerate negotiations. Nonetheless the back-and-forth adds to volatility as companies have had to work fast to respond to a changing environment. The higher costs have not yet been fully passed on by companies as they likely do not want to antagonize already sensitive consumers and have partially mitigated the existing measures by front-loading imports. Economists believe that this can only last so long and continue to anticipate price hikes to filter through the economy in the latter part of the year. In a rare conciliatory act the administration reversed course on export controls related to chip sales to China and signaled a possible extension of the August 12th deadline for a return to higher tariffs on China. This move raised hope that the two nations could come to some sort of deal, or series of deals, that would reduce tensions and improve trading dynamics.

Returns were roughly flat for the Real Asset Index during the period, which was enough to outperform the broader global equity market. Global Equity returns were led by the Technology, Real Estate, and Consumer Discretionary sectors, while the Materials, Energy, and Health Care sectors weighed on returns. The Real Asset Index was led by the Commodity Futures and Global Real Estate segments. The Natural Resource Equities, Global Infrastructure Securities, and U.S. Treasury Inflation-Protected Securities (TIPS) underperformed. Among other indicators we track, the VIX, an index that measures the expected volatility of U.S. stocks, ended the period higher by 8% at 17.2. Credit spreads marginally tightened with investment grade spreads falling three basis points (bps) and high yield (below-investment grade) spreads falling three bps. Gold prices rose 1%, climbing $33 to end at $3,347/ounce, while the U.S. dollar strengthened 0.9%, according to the DXY Index, a measure of the dollar’s performance against major trading partners. Oil prices settled 2% lower, down to $66/barrel. Breakeven spreads rose 11 bps for the 5-year and 8bps for the 10-year segment.^[1]

Why it matters: We continue to monitor economic data, where tariff-related inflation has yet to be realized while employment data has stabilized after a period of softness. Hopefully the downside risk in the labor market has been minimized. We continue to look for how the latest developments will impact the corporate landscape. The One Big Beautiful Bill certainly has created incentives for significant investments therefore we are reminded of Charlie Munger’s wise words, “Show me the incentive and I will show you the outcome.” This week we will review the latest U.S. data during a quiet period of waiting for a change in sentiment, economic data, and Fed decision making.

• U.S. Jobs: Jobs data showed marginal improvement as initial jobless claims came in at 221k for the period ending July 12, which was the lowest print since mid-April. That was below the prior revised reading of 228k and below expectations. The 4-week moving average trended down to 229.5k, down from 235.75k, but continuing claims remained elevated at 1956k for the period ending July 5. This suggests the consumer has more runway, which is supportive of economic growth and also pushes out the point at which claims hit the job market stress zone of greater than 260k.^[2]
• U.S. Inflation: Inflation metrics for June diverged as CPI (Consumer Price Index) rose faster both month-over-month (MoM) and year-over-year (YoY), while PPI (Producer Price Index) was flat MoM and slowed YoY at 2.3% for the headline metric and 2.6% excluding food and energy. CPI had its first large acceleration since September of last year, primarily on core goods, food, medical care, and transportation. This showed a broadening of inflation pressure for consumers. For producers (PPI), core goods prices still showed acceleration but was offset by services, suggesting that retailers and manufacturers have eaten some of the higher costs.^[3]
• Sales: Retail sales in the U.S advanced in June. The Control Group measure rose by 0.5%, ahead of the prior revised reading of 0.2%. Looking at sales excluding autos and gas, the increase was 0.6%, well ahead of a flat reading in May.^[4]

Real Assets, Real Insights: This week we look at demand for student housing in the U.K., utility transactions to feed the AI beast, and a pullback in cocoa prices.

• Campus Life (Real Estate): The latest U.K. Universities and Colleges Admissions Services publication detailed potential growth for university enrollment. Total applications for 2025/2026 grew 1.3% year-over-year, with strong growth from China and the United States. Domestic applications also rose 1.2% YoY. The data gives an insight into potential demand for student housing but doesn’t illustrate the full potential as it doesn’t include postgraduate studies and non-UCAS applications. The final student enrollment and acceptance data will provide further clarity on demand for student housing, which could help underpin this UK sector.^[1]
• Power Grab? (Infrastructure): The rising AI data center thirst for quick-to-market energy has prompted a search for assets to fulfill that need. Talen Energy Corp. has announced the fourth biggest deal of the year as they agreed to pay $3.8 billion to purchase gas-fired electricity plants with a combined 3 gigawatts of capacity. The plants are located in Pennsylvania and Ohio and are some of the newer models that are more efficient and capitalize on the shale boom within the PJM Interconnection. The PJM includes the Northern Virginia data center capital.^[1]
• High Bar (Commodities): The high price of cocoa has dented demand. Futures dropped to an 8-month low as a result as bean grinding reports came in lower for the second quarter. Asian processing shrank 16% according to the Cocoa Association, Europe showed a 7.2% decline, and North America’s grinding fell 2.8% from the same period in the year prior. The longer-term impacts of the higher prices remains to be seen.^[1]