Market index returns

Month to date since July 02, 2025 as of July 09, 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:

Markets started the second half of the year in rotation mode. Performance laggards from the first half, such as energy stocks, saw gains, while leaders, such as communications services, experienced losses. Economic data in the U.S. remained relatively resilient with both soft data indicators and jobs data chugging along. Continuing unemployment claims remains one of the sore spots to watch for health of the job market though. Tariff headlines remained volatile, but traders have become somewhat desensitized or have been distracted by the 4th of July break in the U.S. or perhaps watching Wimbledon. Summers typically have a lull in trading activity, which is usually more pronounced in August as U.S. and European market participants take summer holidays. The 90-day reciprocal tariff deadline came and went and was ultimately walked back to a “firm” date of August 1st. U.S. President Trump also announced a 50% levy on copper imports into the U.S., which imports roughly half of the copper it consumes. Chile, Canada, Peru, and Mexico are the primary exporters of copper to the U.S., which uses the material in a variety of industrial applications and supports the technology buildout sought by the U.S. administration. Trade surplus aside, President Trump threatened Brazil with a 50% tariff level over the prosecution of former Brazilian President Jair Bolsonaro, a right-wing populist leader on trial for an alleged coup attempt. The reciprocal justification for the tariff might be harder to pin down as Brazil is typically a net importer from the U.S. In 2024 Brazil imported nearly $44 billion worth of goods from the U.S. It remains to be seen which countries and what levels the tariff rates will end up as trade negotiations are expected to extend beyond the August 1st marker.

The Real Asset Index lagged broader Global Equities by posting negative returns as Global Real Estate and Global Infrastructure Securities weighed on performance. Global Equities outperformed on strength in the Technology, Energy, and Industrials sectors, while the Consumer Staples, Real Estate, and Consumer Discretionary sectors lagged. The Real Asset Index components all landed in negative territory with relative outperformance from U.S. TIPS (Treasury Inflation-Protected Securities) and Natural Resource Equities. Commodity Futures ended the period in line with the index, down -0.8%. Among other indicators we track, the VIX, an index that measures the expected volatility of U.S. stocks, ended the period lower by 4% at 15.9, falling below 16 for the first time since February. Credit spreads rose modestly from historically low levels across the credit spectrum, as investment grade spreads rose two basis points (bps), and high yield (below-investment grade) spreads rose one basis point. Gold prices were slightly negative, retracing $44 to end at $3,313/ounce, while the U.S. dollar strengthened 0.8%, according to the DXY Index, a measure of the dollar’s performance against major trading partners. Oil prices settled 1.4% higher, up to $68/barrel. Breakeven spreads rose 4 basis points (bps) for the 5 and 10-year segments.^[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. This week one of our favorite strategists pointed out that when considering portfolio positioning it is beneficial if you can identify the “One Big Thing” driving markets. He opined “it appears this is a capital expenditure driven vs consumer driven market/economy.” 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, Fed speak, and metrics from Europe.

• U.S. Data: S&P Global U.S. Services and Composite index came in at 52.9 for June, which was a touch lower than expectations and the prior reading for Services.^[2] The ISM Services Index came in at 50.8 for June, ahead of the prior reading of 49.9, but below expectations of 50.5.^[3] NFIB Small Business Optimism met expectations but a touch lower at 98.6, versus the prior month’s reading of 98.8.^[4] Initial jobless claims were 227k, versus the prior reading of 232k, and roughly within the range for most of the year. Continuing claims showed more weakness as it registered at 1965k for the period ending July 5.^[5] The continuing claims metric has reached levels not seen since the end of 2021 and could signal a more stagnant job market, one where participants are having trouble finding work and a less favorable environment for people who want to change jobs. June’s unemployment rate edged lower from 4.2% to 4.1%. The Labor Force Participation Rate fell from 62.4% to 62.3% and the underemployment rate also dropped a tenth of a percent to end at 7.7%. 
• Fed (Chair?) Speak: U.S. Federal Reserve Governor Christopher Waller spoke recently about moving faster to lower what he sees as a restrictive policy rate. He also mentioned that while “tariffs increase prices one time,” “unemployment is around long run levels.” That point may provide room for faster rate cuts as potential tariff-related inflation could be viewed as transitory. Given Waller’s inclination to cut rates as early as July, his view aligns with the administration’s, helping to keep him in the running to replace Fed Chair Jerome Powell.^[6]
• Germany: German inflation for June came in at expectations and matched the prior readings. Month-over-month (MoM) CPI was flat at 0%, and year-over-year (YoY) it held steady at 2%. Industrial production, an important measure for the export economy, rose unexpectedly 1.2% MoM and 1.0% YoY, ahead of expectations and prior readings of -1.6% and -2.1%, respectively. Exports MoM fell -1.4%, which was worse than expectations but slightly better than the previous revised reading of -1.6%.^[1]

Real Assets, Real Insights: This week we look at the expansion of Dubai developers, Utility deals in the U.S, and Central Bank purchasing of Gold.  

• Spreading Out (Real Estate): Following strong growth in their home market of Dubai, property firms have been expanding internationally. The local housing market grew more than 70% in value over the past four years and this market maturation has helped build substantial cash piles that can be deployed in search of new growth elsewhere. Developers are already in active projects in India, the Maldives, Australia, UK, Canada, and the U.S. The Middle East is a growing part of the real estate market and with significant pools of capital, we expect that to continue to grow in importance.^[1]
• Do we have a deal? (Infrastructure): AES Corp. shares soared by as much as 20% this week, following a Bloomberg report that the U.S. utility is considering strategic options, including a potential sale, amid interest from prospective buyers. Infrastructure investors such as Brookfield Asset Management, BlackRock, and Global Infrastructure Partners have been evaluating AES, according to the report. The company’s shares have halved over the past two years. AES operates a diverse portfolio of renewable energy assets, including wind and solar, alongside natural gas and coal facilities, and owns two utilities in Indiana and Ohio. The company is focused on supplying renewable energy to data center operators and has secured contracts with major tech firms, including Alphabet's Google, Microsoft, and Amazon. Despite owning valuable assets, AES faces challenges from high debt levels and the accelerated phaseout of clean energy tax credits under the Trump administration.^[1]
• Golden times (Commodities): In May, central banks added a net 20 tonnes to global gold reserves, an uptick from the previous month, though the overall pace has moderated. According to the World Gold Council, fresh tensions in the Middle East may have reinforced the strategic appeal of gold for central banks looking to safeguard reserves against geopolitical shocks. The National Bank of Kazakhstan led buying in May with 7 tonnes, followed by Turkey and Poland, each with 6 tonnes in net purchases. Gold remains a focus for central banks worldwide, according to their Central Bank Gold Reserves Survey 2025. Over the past three years, central banks have purchased over 100 tonnes of gold annually, up from 400-500 tonnes per year in the prior decade. This year, 95% of the respondents believe that official gold reserves will continue to increase, up from 81% last year. 43% of central bankers also indicated that their own gold reserves would rise over the next 12 months, a record number. 76% of the respondents project that gold will constitute a moderately or significantly higher share of total reserves over the next five years. This type of broad marginal demand, along with the ongoing de-dollarization trend globally, could be supportive for gold – despite elevated valuation levels.^[7]