Analyst Reports

JULY 2025 Avoid the Lazy Approach Each weekday morning, at 7:30 am ET, Strategas holds its morning meeting. The entire research group, the Firm's sales team and traders gather — very often joined by clients passing through town (and who don't mind an early start to their day). Between research presentations, notes from the road, and often lively debate, we get an informed start to our day. (Clients who do not join us can watch the taped version of each Monday's session on our research portal.) As much as anything, I find the tone of the meeting and the trend in tone over recent meetings to be a good barometer of sentiment – in the room but also, and importantly, of the mood among clients. As we move into late summer, it is tough to characterize investors' sentiment as anything other than roundly optimistic. Moreover, this sense of optimism (and relief) appears to be broadening. After navigating the early-2Q post "Liberation Day" washout without suffering a financial event, and then finding definition on the extension (and expansion) of the TCJA and clarity on the direction of trade policy, (particularly the upper bound on non-China tariffs) as 2Q drew to a close it is not surprising that the U.S. market has broken to back to all-time highs. Throw on confirmation from generally strong quarterly corporate earnings results, growing anticipation of lower policy rates, and the market's ability to cut through the president's schizophrenic policy musings as quickly as they're tweeted, and we agree, it's tough to fade stocks. For a more measured approach, we turn to our monthly Market Balance Sheet exercise, in which we assess 16 foundational market indicators as either an "Asset" or "Liability" to guide our outlook on the economy and markets with dispassion and discipline. Unchanged from June, our weighted measure registered a +6 for July (published 7/28). Not as stretched as we saw before the Financial Crisis and the Covid pandemic, but at a level we would characterize as "safe." Let's be on the watch equally for developments that could manifest either a blowoff top or the fraying of currently strong, fundamental underpinnings. These are the periods when investors are most susceptible to analytical laziness and poor decision-making. FOR ONE-ON-ONE USE WITH A CLIENT'S FINANCIAL ADVISOR ONLY. 1 insight Brought to you by Envestnet S T R A T E G A S -20 -16 -12 -8 -4 0 4 8 12 16 20 Strategas Market Balance Sheet Weighted Shareholder Equity (3Mo Avg) '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Current: 6 Strategas Securities, data through 8/2/2025 20250806-4725191

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