SFM Observer- August 2025

Glenn Sweeney |

SFM OBSERVER

August 2025 Recap

A CONCISE REVIEW OF THE MONTH IN THE INVESTMENT MARKETS

Issued: September 8, 2025

 

The Dow closed the month of August at 45,544 for a monthly gain of 1,413 points for a gain of 3.2%.  Trump is putting his stamp of the Federal Reserve appointing new members and vetting a replacement for Chairman Powell when his term expires next Spring.  He is pushing hard for lower interest rates to stimulate the economy.  Recent job numbers have shown a weakening economy with job searches take much longer than they did in the recent past.  Residential housing activity has also cooled.  The Fed is likely to cut interest rates at their next meeting this month.

 

Some interesting events from the month just passed:

 

  • McKinsey is a famous consulting firm to the Fortune 500, helping CEO’s navigate difficult situations and proposed mergers and combinations.  McKinsey has rapidly embraced AI agents to supplement the advice given by their consultants.  AI checks the logic and projected outcomes of McKinsey advice and does it in just minutes.  McKinsey has slowed hiring from the Ivy League schools and reduced their headcount by 5,000 people.
  • Big companies are buying their own stock in record numbers.  Companies do this instead of declaring dividends because it is an indirect way to reward shareholders without giving them a taxable dividend.  The big buyers this year are Apple, Google, JP Morgan and Bank of America.  Total buybacks will exceed $1 trillion this year.
  • McDonalds is cutting the price of its combo offerings after New York and San Francisco locations raised their prices to $18/combo.  Consumers balked at the prices and management listened.  They are going to lower the price of a combo meal.  The price reductions will likely be 10 – 15%.
  • Some major firms are forecasting weak oil prices through the winter.  Issues involving Russia and Ukraine could impact this forecast but OPEC has been pumping excess oil and it is expected to continue.
  • After Nvidia became the first $4 trillion company, Microsoft joined the club in August, passing the $4 trillion mark in market capitalization.  The emerging AI industry is likely to create a select group of companies that reap huge profits from the adoption of AI by other companies.

 

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