The Markets
Will the bull market in stocks continue?
There is always a diversity of opinion about whether stocks are headed higher or lower. Last week, investors were feeling more bearish than bullish about where the stock market may be headed over the next six months. The American Association of Individual Investors (AAII) Sentiment Survey showed:
| Investor outlook | Week ending August 27, 2025 | Historic average |
| Bullish | 34.6% | 37.5% |
| Bearish | 39.4% | 31.0% |
| Neutral | 26.0% | 31.5% |
While investors who participated in the survey were leaning toward pessimism, some economists and analysts had a sunnier view of what might be ahead. They were optimistic about:
Strong company performance. Profits for companies in the Standard & Poor’s (S&P) 500 Index have been growing steadily. From April through June of this year, earnings grew by about 11.9 percent. It was the third consecutive quarter of double-digit earnings growth. In addition, analysts increased their estimates for earnings of S&P 500 companies over the July through September quarter, according to John Butters of FactSet.
Solid consumer spending. The primary driver of the United States economy is consumer spending. Last week, data showed consumer spending rising. “Inflation ticked up slightly in July, but that didn’t stop shoppers from opening their wallets. Consumer spending grew by 0.3 [percent] last month, the Bureau of Economic Analysis reported Friday, the strongest gain in four months. The increase, fueled by rising compensation, shows households are still willing to spend even as inflation remains elevated,” reported Nicole Goodkind of Barron’s.
In addition, some Americans may find their wallets are a little fatter next year when tax refunds are issued. In August, “…the IRS announced that, as part of its phased implementation of the OBBBA [One Big Beautiful Bill Act], it would not be adjusting W2 or 1099 forms for the current calendar year…This seemingly innocuous statement confirms that we will see an even larger crop of personal income tax refunds early in 2026 than was anticipated when the OBBBA was passed. These higher income tax refunds should work much like a new round of stimulus checks, adding to consumer demand and inflation pressures early next year,” wrote economist David Kelly.
Lower borrowing rates. Many on Wall Street are optimistic the Federal Reserve will begin to lower the federal funds rate in September. Major financial firms “…now expect a 25-basis-point U.S. Federal Reserve rate cut in September following Chair Jerome Powell’s shift in tone at Jackson Hole toward rising risks in the labor market,” reported Rashika Singh of Reuters.
It is impossible to know how the stock market will perform over the short term. That’s why it’s important to hold different types of investments in various asset classes. Holding a well-allocated and diversified portfolio helps investors manage risk while pursuing financial goals.
Last week, major U.S. stock indexes moved lower. U.S. Treasuries rallied as yields declined on all but the longest maturities of Treasuries.
| Data as of 8/29/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.4% | 10.8% | 16.0% | 19.4% | 14.5% | 14.9% |
| Vanguard Total Intl Index (Foreign Stocks) | -1.3 | 22.0 | 16.3 | 14.7 | 8.9 | 7.4 |
| Total Bond Market (U.S. Dollar Bonds) | 0.2 | 5.0 | 3.1 | 3.3 | -0.8 | 1.8 |
| Gold (per ounce) | 2.9 | 31.3 | 36.2 | 25.6 | 11.7 | 11.6 |
| Bloomberg Commodity Index | 1.1 | 4.1 | 6.0 | -6.5 | 7.0 | 1.2 |
S&P 500, Vanguard Total International Stock Index, Vanguard Total Bond Market Index, Gold, and Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized. Sources: Yahoo! Finance; MarketWatch; morningstar.com; djindexes.com; London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
WHAT’S THE SECOND BIGGEST SPORTS LEAGUE IN THE WORLD? The National Football League is #1, but who is #2? Here’s a hint: it’s not Major League Baseball, the National Basketball Association, or the English Premier League (soccer). With $19 billion in revenue, the answer is the National College Athletic Association (NCAA), stated The Economist.
“Hidden behind the pageantry of marching bands, fight songs and century-old rivalries with names like ‘the Backyard Brawl’ lies what is, in effect, the second-biggest sports league in the world (after the NFL)…In 2024 college sport generated twice as much revenue as the English Premier League. Nearly all that came from American football and men’s basketball. For decades the system was lucrative because the labor was free.”
The economics of college sports is changing again this year.
Over the last few years, college athletes had the right to profit from their names, images and likenesses (NIL). For example, it’s estimated that Texas Longhorns quarterback Arch Manning had NIL deals worth $6.8 million, while Livvy Dunne, a gymnast at Louisiana State University, had NIL earnings worth an estimated $4.1 million, according to Nate Cunningham of Sports Illustrated. (Until recently, college athletes gave up their NIL rights when they signed with a college sports team.)
This year, colleges and universities will begin paying their athletes directly. As of July 1, 2025, institutions of higher learning are allowed – but not required – to spend about $20.5 million on athletes, reported Dan Murphy of ESPN. That amount is expected to grow.
“This new era will force athletic-department heads to act more like portfolio managers, balancing returns across a basket of sports. Many have indicated that they will mirror the recent federal court settlement. It allotted three-quarters of retroactive compensation to former football players, 15% to men’s basketball, 5 [percent] to women’s basketball and 5 [percent] to the rest,” reported The Economist.
WEEKLY FOCUS – THINK ABOUT IT
“A teacher told my mother that I would never become successful, which illustrates the difficulty of long-run forecasting on inadequate data.”
– Clive Granger, Nobel Prize-winning econometrician
Best regards,
Waterford Advisors
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* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
https://www.aaii.com/sentimentsurvey or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-02-25-AAII-What-Direction-Do-AAII-Members-1.pdf
https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_082925.pdf or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-02-25-Earning-Insights-2.pdf
https://www.barrons.com/articles/pce-inflation-july-federal-reserve-interest-rates-66e4a5c5?mod=hp_LEDE_C_4 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-02-25-Barrons-Consumer-Spending-Comes-In-Strong-3.pdf
https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-02-25-Barrons-Charts-6.pdf
https://www.economist.com/united-states/2025/08/28/a-19bn-industry-is-about-to-pay-its-workforce-for-the-first-time or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-02-25-The-Economist-A-$19bn-Industry-8.pdf https://www.si.com/college-basketball/highest-paid-college-athletes-via-nil-deals
https://www.espn.com/college-sports/story/_/id/45469454/after-house-settlement-approval-here-next
https://www.brainyquote.com/topics/forecasting-quotes