SFM Observer- July 2025

Glenn Sweeney |

SFM OBSERVER

July 2025 Recap

A CONCISE REVIEW OF THE MONTH IN THE INVESTMENT MARKETS

Issued: August 7, 2025

 

The Dow closed the month of July at 44,131 for a monthly gain of just 37 points for a rare flat month.  The big news this month was passage of the One Big Beautiful Bill by Congress.  This will extend the original Trump tax cuts passed in his first term and add some new tax cuts.  It also raises the estate tax exemption to $15 million per person ($30 million for married couples).  The one issue the Bill does not address is the deficit which will still exceed $1 trillion per year.  A very troubling level.

 

Some interesting events from the month just passed:

 

  • China’s companies are rushing to move production to Vietnam to take advantage of the lower tariffs in Vietnam.  A furniture maker in Vietnam gave all his workers a 45% raise in May so they wouldn’t get poached by all the new companies coming in from China.  This is one of the ripple effects of tariffs that are hard to predict in advance.
  • Nvidia is the first company in history to be worth $4 trillion.  Microsoft and Apple have come close but Nvidia is the first to cross that valuation barrier.  It is incredible for a company that was started in 1993.
  • UPS is offering buyouts to its employees for the first time in its 100+ year history.  Parcel volume has been flat and costs are increasing.  UPS drivers are part of the Teamsters union and a tenured driver makes around $170,000 per year with benefits.
  • DeBeers is having a tough time with lab grown diamonds.  10 years ago, they were just a small fragment of the market but last year they accounted for 40% of the engagement rings purchased in the United States.  DeBeers company value has been falling and they don’t seem to have an answer to this problem as lab grown diamonds are pouring in from India and other countries.
  • Union Pacific railroad has reached a deal to buy Norfolk Southern railroad in a $71 billion deal.  It will create a railroad with rail lines from New Jersey to California and a combined 50,000 miles of track.  It still needs to be approved by the government so this transaction will take some time.

 

Thank you for reading this issue of the SFM OBSERVER.  If you have any comments or questions, please send us a reply.  If you have a friend or associate that might be interested in the SFM OBSERVER, feel free to forward this email.

 

Until next month,

 

Glenn Sweeney CFA